Welcome to The Geopolity’s What We’re Watching (3W), our daily look at the interconnected worlds of Geopolitics, Economics and Energy. Curated from the world’s leading sources of information, our analysis and commentary is designed to help you make sense of the events driving the major developments in the world.
In this roundup, we take a closer look at developments in Artificial Intelligence.
Last week, 3W noted that the US is creating a “national AI infrastructure” by bringing together AI semiconductor companies (NVIDIA, AMD) with the AI software (OpenAI) and hardware (Microsoft for datacenters) companies. We also noted that OpenAI’s strategic direction is now to deploy its technology, for which it has now partnered with Amazon Walmart. At 3W we note this deployment is also centered around US companies.
In our 3W assessment, therefore, AI is on path to develop as a “hemisphere focused solution”, i.e. the US will deploy its AI in its hemisphere while China will deploy its in its hemisphere. There will not be direct competition between the two AI infrastructures over customers, but over technological advancement – whichever national AI infrastructure outcompetes the other will provide the hemisphere it is part of with a holistic competitive advantage over the other.
Furthermore, we look at:
- The first accusations by the US – Israel Alliance that Hamas is not abiding by its commitments under the ceasefire agreement; where 3W notes this is a “tried a tested” tactic by the Alliance to not have to abide by its own commitments after getting from the other side what it wants – just ask Lebanon / Hezbollah
- The decline in western military support for Ukraine over the summer
- Venezuela’s offer to return to the US hemisphere; where 3W notes the offer is effectively an offer for Venezuela to return to the US vassal status that Hugo Chavez fought against
- The border clashes between Pakistan and Afghanistan; where 3W notes this is happening while the US pushing Afghanistan to hand over Bagram airbase back to the US
- The International Monetary Fund’s updated outlook for the global economy
- The indications the US Fed is getting ready to further reduce interest rates in order to support US economic growth
- The IEA’s and OPEC’s differing views on the state of the global oil market
Geopolitics
Gaza – Israel has already claimed Hamas has violated the ceasefire agreement and threatened to delay implementation of other key aspects of the deal, writes Axios. The dispute is over the remains of 28 deceased hostages. Hamas promised to return all 28 but stressed during the negotiations that it didn’t know the exact locations of many of them. It says some are trapped under rubble, and it could take months to find all of them. Israeli prime minister Netanyahu on Tuesday approved blocking the Rafah crossing from Gaza into Egypt from reopening and halving the number of aid trucks entering Gaza, as he claims Hamas is behind schedule when it comes to handing over bodies of deceased hostages. On Wednesday Israel announced it had “restarted preparations” for opening Rafah, writes Reuters, but raised the subject of Hamas’ arms as a next subject to justify not abiding by its part of the deal, again Axios writes. Hamas’ security forces have reestablished control over the parts of Gaza from which Israeli troops withdrew. But now pressure is on Hamas to disarm themselves, with US president Trump saying, “They’re going to disarm … and if they don’t disarm, we will disarm them”.
At 3W we are not surprised by the development. In our original analysis of the Trump Peace Plan we mentioned that it is very likely that the US – Israel Alliance, after getting what it wants from Hamas, will use excuses to not abide by its parts of the deal. This is a “tried a tested” tactic by the Alliance to not have to abide by its own commitments after getting from the other side what it wants – just ask Lebanon and Hezbollah.
Ukraine – New data on Western military aid to Ukraine is showing that it plunged by 43% in July and August compared to the first half of the year, writes The Associated Press. The fall occurred even after European allies began buying American weapons for Ukraine under a financial arrangement known as the Prioritized Ukraine Requirements List, or PURL. Denmark, the Netherlands, Norway and Sweden have been buying US weapons to send to Ukraine. But Italy and Spain, among other members of the 32-nation alliance, are sending very little compared to these NATO partners. In response, NATO defense ministers will meet on Wednesday to try to drum up more military support for Ukraine.
Venezuela – In hoping to end the US pressures on their country’s government, Venezuelan officials have offered the Trump administration a dominant stake in Venezuela’s oil and other mineral wealth, writes The New York Times. Venezuela offered to open up all existing and future oil and gold projects to American companies, give preferential contracts to American businesses, reverse the flow of Venezuelan oil exports from China to the United States, and slash his country’s energy and mining contracts with Chinese, Iranian and Russian firms. For now, the US has refused the offer, though NYT notes that inside US diplomatic circles there are some who believe the offer should be accepted, while secretary of state Rubio is pushing for nothing short of regime change in Venezuela. 3W notes the offer effectively is an offer for Venezuela to return to the US vassal status that Hugo Chavez fought against. This, in turn, indicates that there is nothing ideological about the current ruling regime in Venezuela. Its focus is purely on maintaining control, for the material benefits this brings them. This, then, in turn, means there is no strategic reason for the US to push for regime change via military intervention, as deals can be made with the current regime.
South Asia – A new conflict is developing in Central Asia, as border skirmishes between Pakistan and Afghanistan have become recurring since last Saturday, writes The Associated Press. The two countries have been trading fire across multiple border regions, resulting in dozens of casualties on each side. 3W notes this is happening while the US is pushing Afghanistan to re-open the Bagram Airbase for deployment of the US military. The two subjects might of course be unrelated, but at 3W we never assume “coincidence” until there is evidence to support this. In this case, we note that US is proposing that it get involved in the conflict. US president Trump has suggested to step in to resolve the conflict between Pakistan and Afghanistan, writes Bloomberg. And this, we at 3W believe, is an indication that more is going on than just a coincidence…
Macroeconomics
The International Monetary Fund edged up its 2025 global growth forecast, writes Reuters. The IMF said in its World Economic Outlook that recent trade deals between the US and some major economies have avoided the worst of Trump’s threatened tariffs with little retaliation, prompting its second growth upgrade since April. The IMF now predicts global real GDP growth at 3.2% for 2025, up from a July forecast of 3.0% and a more severe April forecast of 2.8% that came after Trump imposed broad global “reciprocal” tariffs and a tit-for-tat escalation with China ensued. It sees global growth at 3.1% in 2026, unchanged from the July forecast.
A sharp slowdown in hiring poses a growing risk to the US economy, Federal Reserve Chair Jerome Powell said on Tuesday, writes The Associated Press. Powell also reiterated a message he first delivered after the September meeting, when he signaled that the Fed is slightly more worried about the job market than its other congressional mandate, which is to keep prices stable. The remarks are widely considered an indication that the US Fed is getting ready to further reduce interest rates in order to support US economic growth.
Energy
The international Energy Agency (IEA) says world oil market faces an even bigger surplus next year of as much as 4 million barrels per day, writes Reuters. A surplus of 4 million bpd would be equal to almost 4% of world demand. In the IEA’s view, supply is rising far faster than demand. This year, it expects supply to rise by 3.0 million bpd, up from 2.7 million bpd previously. Next year, supply will rise by a further 2.4 million bpd, it said. The agency on Tuesday also trimmed its forecast for world demand growth this year to 710,000 bpd, down 30,000 bpd from the previous forecast, citing a more challenging economic backdrop. The IEA’s view on the potential surplus is larger than that of others. A Reuters poll of analysts in September suggested the market could face an oversupply of 1.6 million bpd in 2026.
Meanwhile, in its monthly report OPEC said the world economy continues to show solid growth and therefore maintained its forecasts for global oil demand to rise by 1.3 million barrels per day this year, and by a slightly faster rate in 2026, writes Reuters. “The robust global economic dynamics seen in the third quarter of 2025, coupled with upward revisions to second-quarter 2025 growth in the U.S. and Japan, as well as strong data from India and China, reinforce a stable global growth outlook,” Consequently, world oil supply is expected to closely match demand next year, in the OPEC assessment.
The financial markets appear to have more confidence in the IEA. Oil prices fell to a five-month low on Tuesday, writes The Financial Times. Brent crude dropped as much as 3 percent to $61.50 a barrel, its lowest since early May, before recovering to $62.26 by close of trading.
Technology
Last week, 3W covered the developments in the area of AI in the US. In summary, we noted that the US is creating a “national AI infrastructure” by bringing together AI semiconductor companies (NVIDIA, AMD) with the AI software (OpenAI) and hardware (Microsoft for datacenters) companies. We also noted that OpenAI’s strategic direction is now to deploy its technology. In August it signed an agreement with Amazon to make its AI available to Amazon customers.
Now, The Associated Press writes OpenAI has signed a similar agreement with Wallmart. Walmart said the new offering will give customers the option to “simply chat and buy.” That means the retailer’s products would be available through instant checkout in ChatGPT — allowing users to buy anything from meal ingredients or household items, to other goods they might be discussing with the chatbot. 3W notes this deployment is also centered around US companies. Our main take away from all this is that AI is likely to develop as a “hemisphere focused solution”, i.e. the US will deploy its AI in its hemisphere while China will deploy its in its. There will not be direct competition between the two AI infrastructures over customers, but over technological advancement – whichever national AI infrastructure outcompetes the other will provide the hemisphere it is part of with a holistic competitive advantage over the other