Ukraine Surprise Counter Is Cutting Off Russian Salient Towards Lyman

Ukrainian forces have again outfoxed the Russians hoping that their relentless attacks around Lyman will force the Ukrainians to retreat. 

Instead, Ukrainian counterattacks on the Russian attacks are in the process of cutting off the Russian units involved and creating a crisis of their own making. JL

David Axe reports in Trench Art:

To attack Sloviansk and Kramatorsk from the north, the Russians must first march through or around Lyman. But the Ukrainian 3rd Corps is counterattacking behind the lead Russian elements. It's been a successful strategy . Now the Russians are reeling and Ukrainian troops are pushing back against the salient, indicating Ukrainian advances at multiple points around the salient. "All evidence suggests Ukraine has advanced further than any map depicts north of Lyman. Ukraine has captured towns that were once firmly held but are now contested." Time means opportunity, and Ukrainian drone forces have been seizing the opportunity to intensify their attacks on Russian supply lines all across occupied Ukraine. That means the pessimistic scenario for Russia is increasingly likely.

AI Thinks AI Is Likely To Be Inflationary

AI knows. While investors, VCs, tech execs and others extol its virtues as 'the disinflationary force of our time,' the reality - according to OpenAI, Anthropic and Deutsche Bank's proprietary AI - is that the massive investment in AI along with the hype around it is likely to be inflationary. 

There will no doubt be howls of outrage from its proponents, but as the old saw goes, 'who you gonna believe: the data or your lying eyes?' AI is being honest about the forces it sees, even if those with the greatest stake in it continue to maintain an alternative narrative. JL

Nick Lichtenberg reports in Fortune on report in Deutsche Bank Research Institute:

For two years, a consensus has been that AI is a great disinflationary force. The logic is that AI substitutes cheap technology for human labor. It supercharges productivity. It lowers barriers to entry. The result is a decline in inflation. (But) when Deutsche Bank economists tested that consensus—by asking AI tools—the machines disagreed. DB posed a structured probability question to Deutsche Bank’s own tool, dbLumina; OpenAI’s ChatGPT-5.2; and Anthropic’s Claude Opus 4.6. The prompt asked each model to assign probabilities to four outcomes for U.S. inflation—that AI raises it, leaves it unchanged, slightly reduces it, or meaningfully reduces it—over both a one-year and five-year horizon. The answer: At the one-year horizon, all three tools agreed that the most likely outcome is minimal impact. Every model rated AI raising inflation as more probable than AI meaningfully reducing it. The culprit cited across all three models is the AI investment boom itself. 

Russia Has Only 203 Tanks Left At Its Main T-80 Plant

The Kremlin cannot produce enough new tanks to prosecute its stalled invasion of Ukraine, let alone start a broader war with Europe. JL

Ivan Krychevksyi reports in Defense Express:

Satellite imagery indicates that 203 T-80 tanks are stored at the Omsktranshmash facility. Three months earlier, 253 vehicles of this type were visible at the same site. Based on these figures, Russia's defense industry appears to be producing an average of15 T-80BVM tanks per month, while the remaining stockpile would be sufficient for another 12.5 months of work. Russia lacks the ability to manufacture new T-80 tanks. The primary reason is the loss of the industrial capability required to produce the tank's gas-turbine engines. 

3 Russian Units Preparing For Front Destroyed In Ukraine Drone Strike

Ukrainian drone forces are continuing their decimation of Russian troops preparing to advance to the front, particularly in Zaporizhzhia oblast. 

One of the Russian formations destroyed in this latest strike was the 40th Naval Infantry, from Kamchatka, in Russia's Far East, which had recently been reconstituted after its predecessors were wiped out in a series of catastrophic meat assaults near Vuhledar over a year ago. JL

The Kyiv Post reports:

Ukraine's Unmanned Systems Forces executed a multi-target drone strike deep within Russia’s operational rear in the Zaporizhzhia region, inflicting heavy losses on three Russian units preparing to rotate to the front lines. Among them was the Kamchatka 40th Naval Infantry Brigade, that spent a year spearheading unsuccessful assaults on Vuhledar, depleting the majority of its original combat personnel. The latest strikes also complement Ukraine’s broader asymmetric strategy to throttle Russian logistics and choke off occupied Crimea

Ukraine's Drones Force Russian Convoys To Ride With Gun Trucks and A Prayer

With Russia losing 500 trucks a day, on average, it would appear that the mobile anti-drone truck gun teams aren't working - and that the Russian prayers are not being heard. JL

David Axe reports in Euromaidan Press:

Russian logisticians are desperately scrambling to save their truck convoys from Ukrainian drones. Besides rerouting convoys away from the most vulnerable highways, some commanders are also deploying mobile gun teams to escort the cargo trucks. Ukrainian drone units flying jam-resistant middle-strike drones with AI-assisted targeting—the $5,000 Swift Beat Hornet is one of the most common—initially targeted convoys traveling along the most obvious routes, including the west-to-east M-14 highway connecting southern Russia to occupied Crimea. The M-14 is the Ukrainian portion of the wider European E-58 highway. By late May, they were tallying hits on 500 Russian trucks every day, a ninefold increase on the overall average of daily truck strikes since February 2022. Just 3,500 Russian cargo trucks plied the M-14 every day, so the losses were significant. 

OpenAI Considering "Steep" Price Cuts To Compete With Anthropic

Amidst the euphoria generated by SpaceX's IPO yesterday, which apparently suggests to many that there is nowhere to go but up for AI, the two real AI leaders - OpenAI and Anthropic - who are also planning for stratospheric IPOs, are locked in brutal competition. And that is heightened by growing reluctance on the part of corporate customers to continue to pay eye-watering sums for AI access. 

As a result, OpenAI is actively contemplating significant price cuts to keep customers because it thinks Anthropic will do the same. As a general rule of economics, and even of tech, this does not bode well for hockey stick financial projections on which the two firms' valuations are currently based. Just sayin'. JL

Cris Tolomia reports in Quartz:

OpenAI is considering significant price cuts to its AI services as it looks to pull customers away from rival Anthropic. Tokens are among the areas where OpenAI is considering charging less, driven partly by expectations that Anthropic will pursue its own reductions. OpenAI CEO Sam Altman has acknowledged pricing pressure from business customers "a huge issue." Business leaders have grown increasingly reluctant to authorize large AI spending. Steep discounting would put additional pressure on two businesses that are already deep in the red, given the massive infrastructure expenditures involved in powering AI systems at scale even as both companies prepare for IPOs.

The War In Ukraine Is the Last In Which Soviet Armor Will Fight

It is not so much that tanks are obsolete, though that is still being determined by drone warfare developments on both sides, but that the Kremlin has almost completely exhausted the stockpiled inventory it had accumulated over eight decades before invading Ukraine. 

While some remain to be upgraded, their value had diminished in light of the contemporary battlefield's challenges. JL

Jompy reports in Fronts.Co:

This will be the last great war fought with Soviet-era armor. The Ukraine invasion war’s opening months were characterized by losses we can politely call 'eyewatering' That Russia had started deploying ancient T-54/55s in summer 2023 was proof of how far they had to reach to keep their formations equipped, and even then they were frequently understrength. (Now) armor is) still being used, but rarely and almost never in the amounts it used to be; a few tanks and IFVs trying small pushes, or tanks used as APCs to transport infantry. The loss of the vast Soviet stockpiles means the capability to quickly regenerate after attritional warfare won’t be there anymore for Russia. They’ll have to change their approach to warfare, not being able to throw massive armored pushes at the enemy anymore nor waste any piece of equipment