CMR is the leading provider
of funding and management
support for small to
medium-sized businesses and
entrepreneurs
Established 1984 C MR
is the leading venture
capital, management
support and business
services provider for
small to medium-sized
businesses - linking
excellent management
skills with the
substantial financial
resources of a global bank
of private investors.
CMR has over 450 senior
executives, operating
in the UK, USA, Europe, Asia,
Australasia and
globally,
providing both funding and
specialist help for
entrepreneurial
businesses .
For Businesses
CMR provides excellent
resources:
CMR FundEX Business Exchange - gives all companies & entrepreneurs direct access to CMR's global investor base.
CMR Catalyst Group
Programme -
transform
profitability through
merging.
CMR Company Sales Division helps owners to exit
at the best price.
CMR Corporate Recovery
Division -
experts in rescue and
turnaround.
CMR Technology Licensing
Division -
commercialising
innovation.
CMR Executive
Professionals - management support
and consultancy.
CMR Executives-on-Demandâ„¢ Fully experienced
senior executives
available quickly and
cost effectively.
We always welcome
contact with new
business clients- please get in touch
- we will do our
best to match
your needs and exceed
your expectations.
For Investors
Preferential access to new opportunities for investment and/or acquisition
P re-vets
propositions and
provides a
personalised service
to our investors
Syndication service
enabling investors to
link together as desired
Executive and
management support for
investments as needed
CMR's services to
our investors are not
only fast & efficient
but also free
W e
always appreciate new
members- you are welcome
to join as an investor
or as a CMR Executive.
When you
join us as a Senior
Executive:
CMR's strength is in the
skills and experience of
our executive members -
all senior, director level
people with years of
successfully running and
managing companies.
Because the demand for
CMR's support and services
is ever-increasing,
especially as we enter
recessionary times, we
have a growing need for
more high calibre
executives to join us from
every industry and
discipline.
You will be using your
considerable experience to
help smaller businesses
and entrepreneurs to grow
profitably.
We offer full training
and mentoring support to
help maximise potential.
We are
always keen to find more
high calibre senior
executives in all areas-
skills and location.
Make contact with us today
and maximise your
opportunities.
HEAD
OFFICE
124 City Road
London EC1 2NX
Tel: +44 (0)207-636-1744
Fax:+44 (0)207-636-5639
Email: cmr@cmruk.com
Registered Office:
124 City Road ,
London EC1 2NX
Also Glasgow,
Dublin, Switzerland, Europe, USA/Canada
Privacy Statement: CMR only
retains personal details
supplied directly by executives
joining CMR themselves either as
Full Executive Members or
Interim Management Members or
Investors. Those details are
only used within CMR and not
disclosed to any third parties
without that person’s
agreement. We will keep that
data until requested by the
person to be removed – at that
point it will be deleted.
Personal data is never sold or
used for purposes outside of
CMR’s normal operations. Any
correspondence should be
directed to the Managing
Director, CMR,
Kemp House,
152-160 City Road, London EC1V
2N
Senior Executives
CMR is a worldwide network of senior executives. Join us to expand your career and business horizons.
Business Entrepreneurs
CMR has a complete range of resources & services provided by experts to help all businesses to grow and prosper.
Investors & Venturers
CMR has a continuous stream of business and funding propositions, which are matched to investor preferences. Join us - it's FREE!
FundEX
FundEX is CMR's worldwide stock market for small to medium sized companies and entrepreneurs to raise new capital.
Interim & Permanent Management
Many of CMR's executives can be recruited on an interim, permanent or NED basis.
Login
Main CMR Intranet members only
Regional Intranets
Sat, 04 Apr 2026 15:05:00 +0000 FBI Arrests Eight Suspects In $60 Million LA County Over Hospice Fraud
FBI Arrests Eight Suspects In $60 Million LA County Over Hospice Fraud
FBI Arrests Eight Suspects In $60 Million LA County Over Hospice Fraud
Authored by Madeline Shannon via The Center Square ,
The FBI made multiple arrests Thursday in Los Angeles County in connection with allegations over a total of $60 million in hospice-related Medicaid fraud.
First Assistant U.S. Attorney Bill Essayli announced the arrests for Operation Never Say Die during a news conference .
“Federal agents from multiple agencies descended on fraudsters throughout Southern California , executing multiple arrests and search warrants,” Essayli told reporters.
Eight people were arrested, Essayli said, and charges will be brought against 15 individuals who are accused of defrauding $60 million in health care fraud in greater Los Angeles County, including allegedly operating fraudulent hospice care businesses.
Lolita Minerd, 65, from Anaheim, ran Artesia-based Topanga Hospice Care, which ran a $9.1 million price tag over five years, Essayli said.
According to Essayli, one couple said they were approached by Minerd at a grocery store to sign up as patients for her hospice care business. Essayli said they each received $300 a month from Minerd for allowing her to use their names as patients for her business.
Medicare paid $8.5 million on fraudulent claims filed on this couple’s behalf, Essayli said.
Another couple, Gladwin and Amelou Gill, who were both previously convicted of tax evasion charges, were barred by law from opening a hospice, so they used their daughter’s name to open the hospice care, Essayli said. He added their hospice received more than $4 million in Medicare reimbursement payments, and he noted they discharged 70% of their patients.
Another person named in the press conference, Nita Palma, 76, who was previously convicted of health care fraud and is in a federal prison in Seattle, operated another hospice fraud company in Glendale with her husband Adolfo Catbagan, 68, of Glendale, for more than a year and a half, Essayli said. He added the couple submitted more than $4.8 million in fraudulent hospice care claims and got back more than $3.2 million from Medicare.
“This is not just a fraud problem. This is a California problem,” Essayli said during the press conference.
“The problem you see in California is that there is no vetting and no checking. They do not care because it’s not their money.”
The press conference followed an early morning arrest of Gladwin and Amelou Gill in Los Angeles.
Dr. Mehmet Oz, the administrator for The Centers for Medicare and Medicaid, said during the news conference that he was present in Los Angeles during the couple’s arrest.
“These law enforcement leaders and these brave men and women that I was able to witness this morning go after these criminals are doing God’s work,” Oz said.
“And they’re going to be able to do it more effectively because there’s been a demand made by the president and vice president of an all-of-government effort.”
One of the hospice care facilities billed Medicare more than $9.1 million over five years for the care of patients who were supposedly terminally ill, Essayli said. He added the facility discharged 85% of their patients – five times the national average for a facility that is supposed to care for dying patients.
Assemblymember Alexandra Macedo, R-Tulare, reacted on Thursday to the arrests.
“Dr. Oz was excited to share with me that arrests were happening, and that this was just the beginning of what they would be doing out in California to combat hospice fraud,” Macedo told The Center Square on Thursday.
“But they have a lot of questions as to how this was allowed to happen under [Gov.] Gavin Newsom’s watch for as long as it did.”
Macedo conducted a hospice fraud investigation herself in recent weeks, finding multiple hospice care businesses registered to addresses that are the locations of empty lots or run-down, empty buildings, according to previous reporting by The Center Square .
Her investigation showed that 300 separate businesses were tied to a small number of addresses, which she drove out to herself. She also found that many of the phone numbers associated with those businesses were disconnected. Macedo sent the results of her investigation to Congress.
“What my investigation showed me is who the ‘straw men’ were as the registered agents,” Macedo told The Center Square.
“But there is very clearly somebody teaching them how to do this, or, in my opinion, a puppet master, so finding out who these people are attached to will come out with time.”
According to the U.S. House Committee on Oversight and Government Reform, Medicare, which reimburses hospice care providers, was defrauded an estimated $3.5 billion from fraudulent Medicare reimbursement payments just in Los Angeles County.
“The recent hospice fraud arrests in California are a stark reminder that government healthcare programs are vulnerable to abuse without strong oversight,” state Sen. Tony Strickland, R-Huntington Beach, told The Center Square on Thursday, answering questions by email.
“Millions in taxpayer dollars were siphoned off while vulnerable patients were put at risk. It’s time for real accountability, aggressive enforcement, and consequences for those who failed to act.”
Some Democratic and Republican lawmakers who have authored Medicare-related legislation in California or who represent districts that include Los Angeles did not respond to The Center Square on Thursday.
Other lawmakers on both sides of the aisle communicated through a spokesperson that they were not available to comment. The Centers for Medicare and Medicaid and the FBI did not respond to The Center Square’s requests for comment.
While representatives with Newsom’s office were not immediately available to discuss the arrests, they directed The Center Square to a comment that Newsom’s press office posted on X on Thursday morning.
“Great to see the federal government root out fraud in Trump’s federal health care system in California!” the press office said. “We’re fully supportive.”
The post goes on to note “@CAGovernor Gavin Newsom banned new hospice licenses in 2021 because of rampant fraud.”
Tyler Durden
Sat, 04/04/2026 - 11:05 Close
Sat, 04 Apr 2026 14:30:00 +0000 Trump Reminds Iran "48 Hours Before All Hell Will Reign Down" As Search For Missing US Pilot Continues
Trump Reminds Iran "48 Hours Before All Hell Will Reign Down" As Search For Missing US Pilot Continues
Trump Reminds Iran "48 Hours Before All Hell Will Reign Down" As Search For Missing US Pilot Continues
Summary
President Trump reminds Iran of deal timeline, threatens "all hell will reign down" if time runs out.
Israel launched heavy strikes on Tehran , targeting Iranian air-defense and ballistic-missile sites, while a projectile also hit the perimeter of Iran's Bushehr nuclear plant
The U.S. military continued search operations for an American airman who ejected after an F-15E fighter jet was shot down over Iran
* * *
President Trump Reminds Iran of Timeline, Threatens "All Hell Will Reign Down"
As the long weekend continues, President Trump has issued a statement on his social media feed, reminding Iranian negotiators of his timeline for a deal:
Remember when I gave Iran ten days to MAKE A DEAL or OPEN UP THE HORMUZ STRAIT.
And then the threat:
Time is running out - 48 hours before all Hell will reign down on them.
Glory be to GOD! President DONALD J. TRUMP
The odds of 'boots on the ground' have soared to 83% by the end of the month:
It seems the stock market's hope (diverging from oil's surge) was misplaced...for now.
Search Operations Continue for Missing Airmen Continues
With U.S. and Israeli air-delivered munitions still striking targets across Iran, and Tehran retaliating by hitting high-value sites around the Gulf area, while continuing to disrupt the Strait of Hormuz, the conflict is now entering its sixth week with no credible signs of near-term de-escalation. Add in President Trump's speech last week, which warned that intense targeting could continue for a few more weeks, and it's a very fair assessment that the conflict will carry into next week, with momentum and escalation to the upside.
On Saturday, the U.S. military continued search operations for an American airman who ejected after an F-15E fighter jet was shot down over Iran, marking the first downed U.S. aircraft in the conflict. One crew member was rescued, but the second remained missing, with Iranian forces also racing to find the missing pilot.
The downed F-15 jet came shortly after a U.S. Black Hawk was hit by ground fire, and an A-10 Thunderbolt II reportedly crashed Friday near the Hormuz chokepoint. Friday was not a great day for U.S. aircraft as the conflict intensified.
C-17 Globemaster IIIs are on the move.
Strikes Continue on Both Sides
In a rapidly escalating phase of the US-Israel war on Iran (now around day 36+ since late February strikes that targeted Iranian leadership and infrastructure), Tehran has intensified its retaliation while the US and Israel press air campaigns. Iranian missiles struck central Israel on Saturday, triggering widespread sirens and causing visible damage, including to residential areas and an industrial zone near Beersheba. Reports mentioned cluster bomb effects and shrapnel injuries, though Israeli defenses intercepted many projectiles.
At the same time, Israel launched heavy strikes on Tehran, targeting Iranian air-defense and ballistic-missile sites, while a projectile also hit the perimeter of Iran's Bushehr nuclear plant, according to the semiofficial Iranian Tasnim news agency. The International Atomic Energy Agency said Iran had notified them about the incident.
Let's not forget President Trump's speech on Wednesday, in which he suggested the conflict could continue for weeks and insisted the missing airman would not alter efforts to negotiate an end to the conflict.
Iran launched a fresh missile barrage at central Israel, causing fires, damage in areas like Negev, Rosh Haayin, Bnei Brak, and reports of cluster munitions; minor injuries reported, with one man hurt in Bnei Brak.
An apparent Iranian drone damaged the Dubai headquarters of the U.S. tech giant Oracle on Saturday after Iranian forces threatened dozens of US firms. Iran has been targeting Gulf area data centers, and reports of a water desalination plant on Friday made headlines.
Latest headlines
(courtesy of Bloomberg):
US Military Losses
Iran shot down a US F-15E Strike Eagle fighter jet on Friday, with one crew member still missing and search-and-rescue operations ongoing [APW] [BN] [APW]
A second US combat plane reportedly crashed in the Persian Gulf the same day [BN] [APW]
Iran has called on the public to find the 'enemy pilot' and is promising a reward [APW]
Iran says it used a new air defence system to target the US fighter jet [NS1]
Iranian Attacks
Iran's Revolutionary Guards targeted an Israel-linked ship, the MSC Ishyka, with a drone attack in the Strait of Hormuz, setting it on fire [NS8] [NS1]
Iranian cluster missiles hit central Israel with at least four impact sites and reports of vehicles on fire [NS8]
Missile fragments impacted near Tel Aviv after an Iranian missile barrage, with no casualties reported [JPT]
US-Israeli Strikes
US-Israeli strikes allegedly hit multiple areas in Iran on Saturday, targeting government-affiliated and industrial facilities including the Bushehr nuclear site [NS8]
More than 30 universities across Iran have been directly targeted by US-Israeli strikes since the war began in late February [NS8]
The US destroyed the B1 Bridge in Karaj on April 2 in two separate bombings, targeting what Iran describes as a civilian engineering project [NS8]
Diplomatic Efforts
Pakistan, Turkey, and Egypt are working to bring the US and Iran back to the negotiating table with a compromise framework focusing on ending hostilities and reopening the Strait of Hormuz [NS8]
Global Impact
The war has entered its sixth week with energy prices rising and little sign that Iran will back down or reopen the vital Strait of Hormuz [BN]
Senegal has banned all but essential foreign trips for government ministers due to cost-saving measures triggered by the energy crisis linked to the Iran war [APW]
Chinese firms with ties to the military are marketing detailed intelligence on US force movements as the war continues [WPT]
In commodity markets, the ongoing energy shock, with crude and LNG facilities across the Gulf area disrupted and the Hormuz chokepoint still clogged, prompted Goldman analyst Yulia Zhestkova Grigsby to ask on Friday evening: "Are We Running Out Of Oil?"
"As the last tankers that crossed the Strait of Hormuz before the war are reaching their destination, concerns about potential oil shortages are rising," Grigsby told clients.
She said, "We analyze country-product-specific oil markets, identify pockets of potential extreme tightness, and discuss the potential evolution of near-term shortages if the Strait of Hormuz remains effectively closed for longer."
"Our three-way analysis highlights already critically low supplies of petrochemical feedstocks -- naphtha and LPG -- in Asia, with cross-product scarcity in multiple Asian countries in April," the analyst added.
To end the week, Brent futures and WTI futures both closed Friday in triple-digit territory as traders are becoming increasingly alarmed not just of the crude oil and LNG shortage spreading worldwide but also of petrochemical supply disruptions that are inbound that could affect plastics production , the core material that is bedrock for the modern economy.
Let's remind readers of how the energy shock dominoes fall.
JPMorgan analysts mapped out how the energy shockwave from the Iran war spreads across the world, hitting Asia first, then Africa and Europe, before settling on the US - primarily California.
Source
We'll provide updates throughout the day as the situation in the Middle East is ongoing.
Tyler Durden
Sat, 04/04/2026 - 10:30 Close
Sat, 04 Apr 2026 13:55:00 +0000 Downed U.S. Drone Appears On TikTok Live As Iraqi Children Try To Sell It
Downed U.S. Drone Appears On TikTok Live As Iraqi Children Try To Sell It
As the U.S.-Iran conflict enters its second month, America's Low-Cost Unmanned Combat Attack System, or LUCAS, is becoming increasingly visible across the Mid
Read more.....
Downed U.S. Drone Appears On TikTok Live As Iraqi Children Try To Sell It
As the U.S.-Iran conflict enters its second month, America's Low-Cost Unmanned Combat Attack System, or LUCAS, is becoming increasingly visible across the Middle East theater, a sign that the Department of War has learned one critical lesson from both the Iranian drone playbook and the Ukraine-Russia war: cheap drones are the future of warfare.
The latest news on LUCAS comes from an unverifiable TikTok video, amplified on X, which appears to show a downed drone seized by Iraqi children who are reportedly trying to sell it.
If authentic, the footage is another reminder that low-cost drones are proliferating so widely across the region that they will likely spread to other parts of the world.
In a separate video reposted on X, Iranian forces appear to have recovered a LUCAS drone in the Persian Gulf area.
In the first week of the U.S.-Iran conflict, Iraqi civilians reportedly found an entirely intact LUCAS.
Our coverage on LUCAS:
Latest on combat drones:
And, of course, the massive security gap that has followed:
Next for these suicide drones is the integration of AI to fully automate the kill chain, as well as upgraded engines that will accelerate flight, allowing them to evade even some of the world's most advanced air defense systems.
Tyler Durden
Sat, 04/04/2026 - 09:55 Close
Sat, 04 Apr 2026 13:20:00 +0000 How Will AI-Driven Automation Actually Affect Jobs?
How Will AI-Driven Automation Actually Affect Jobs?
How Will AI-Driven Automation Actually Affect Jobs?
Authored by Alex Imas and Soumitra Shukla via Ghosts of Electricity ,
One of the most widely cited findings in AI policy comes from a 2023 paper by Eloundou, Manning, Mishkin, and Rock titled “GPTs are GPTs.” The title is a nice double meaning: the paper studies how general-purpose technologies (GPTs) powered by large language models (also GPTs) may reshape the labor market. The headline finding is that around 80% of U.S. workers could have at least 10% of their tasks affected by LLMs, and roughly 19% may see half or more of their tasks impacted. Broadly, these exposure measures try to capture how “exposed” the occupation is to AI as a function of whether AI can augment the tasks involved in the job: direct exposure is defined as “whether access to an LLM or LLM-powered system would reduce the time required for a human to perform a specific DWA or complete a task by at least 50%.” The authors are crystal clear on this in the paper: exposure corresponds to the capacity of AI to be involved in the job, not the extent to which the job can be automated away. But the word “exposure” turned out to bring on all sorts of anxieties about exactly that—displacement. And perhaps for this reason, these AI exposure measures have routinely gone viral on social media over the last couple of months.
A recent example is by Andrej Karpathy, one of the co-founders of OpenAI and a leader in how to think about AI more generally (e.g., he coined both the terms “jagged intelligence” and “vibe coding”). His dashboard , which he described as a “vibe-coded” weekend project , was a ranking of how exposed major occupations are to AI-driven automation. It quickly went viral on X, as it fed all of the already-existing narratives about rapid job loss due to AI.
After seeing the dashboard sensationalized and spread like wildfire, Karpathy clarified that his “exposure” scorecard was based on a quick, LLM-generated measure of how digital a job is, and was never meant to be a serious forecast of which occupations will shrink or disappear. While his own project website made the same caveat, it was largely ignored on X. To butcher the well-known phrase: “A vibe coded weekend project will travel twice around the world before the caveat has time to put its pants on.”
What this recent episode illustrates, however, is that such exposure measures have caught the public eye but are routinely misread (with some proposing a moratorium on the term “exposure” altogether). When people hear that a job is “80% exposed” to AI, they picture 80% of that job disappearing. The actual economics of AI exposure and job loss are pretty far from that characterization.
What is a “job”?
A job is a set of tasks; a person typically gets paid based on how well they complete all of the tasks associated with the job. So let’s say you’re a project manager. Your job involves a bunch of tasks like generating ideas, outlining those ideas succinctly and getting feedback from team members, putting together presentations, and a bunch of rote work (e.g., approving time sheets, fielding logistics). As the AI models become better, you’ve realized that you can automate many of these things: AI can do a lot of the rote work for you, and can even help you put together presentations. According to the exposure measure, your job is now “exposed” to AI. What happens to your job and what happens to your wage? Well, if automating some of the tasks frees up time to generate better ideas, your overall productivity goes up —you become even more valuable to the firm. Humans are still employed and if anything the wages go up.
On the other hand, if AI automates all of the tasks—let’s say your job only involves two tasks and they both get automated—then yes, human labor will get displaced . Importantly, the fewer the number of tasks (what we call the dimensionality of a job), the greater the incentive of the company to automate it in the first place. This is the part much of the analysis on automation misses: adopting AI into an existing organization is costly, so the firm will be more likely to invest if it can automate the job, not just the task. “Exposure” and risk of automation is not just a function of model capabilities, it also depends on firm incentives. And this is not a hypothetical: we now have plenty of evidence that such incentives matter greatly for what gets automated and when (e.g., firms are much more likely to automate when the cost of human labor increases).
Lastly, even if AI makes people more productive and yields higher wages, there can still be massive layoffs in that sector if consumers do not “absorb” the increased productivity: if productivity-driven price drops do not increase demand for the product, then fewer workers will be needed in that sector.
More generally, a task being exposed to AI—even if that exposure corresponds to full automation of that task—can potentially lead to higher wages and more hiring for that occupation. Or it can lead to layoffs and even full displacement. Whether exposure leads to better or worse labor market outcomes for workers depends on two key variables: the elasticity of consumer demand in that sector (how much more of the product people buy as prices decrease), and the dimensionality of the job (how many tasks are involved in that job). As we hope to convince you by the end of the piece, we should be a lot more worried about jobs like trucking and warehousing than we currently are.
The standard approach to automation
Let us start with the “standard” approach to thinking about automation . First, we decompose jobs into tasks using a taxonomy like O*NET , then evaluate how many of those tasks can be automated or augmented by AI. The total impact on the job is a weighted average of how much each task was improved, which means you can build an “exposure index”—typically defined as what share of a job’s tasks can AI do?—and that index maps linearly into how much the job is affected (see, e.g., Michael Webb’s already-classic paper ). This approach has been enormously useful for mapping the landscape of AI’s potential reach. But it contains an assumption that is almost certainly wrong for most real-world jobs: it assumes tasks are separable. That is, automating task A has no effect on the productivity of task B, and the overall impact is just the sum of parts.
Consider the jobs that you know. There are many out there where the output consists of doing many different things right, not just some of them. You can’t have a cook who follows most of the steps of a recipe, a drummer who is mostly on the beat, a programmer whose code only partially works (or, for that matter, a professor who only does the research half of the job…though some have tested this requirement). These are jobs where each task needs to be completed successfully for the output to be acceptable.
Put differently, the tasks are not separable; they are complements, i.e., doing one task right or wrong affects how well you can do others in the job in order to complete it. That tasks within a job are complements rather than substitutes seems quite plausible for most real-world production. And this has a wide range of important implications for how AI will actually affect jobs.
The O-ring model of jobs
The idea that complementary tasks create nonlinear productivity goes back to Michael Kremer’s classic 1993 paper, “The O-Ring Theory of Economic Development” . The name comes from the tragic Challenger disaster: a single faulty O-ring caused the catastrophic failure of the entire system . Kremer’s insight was that if production requires many steps, and each step needs to be done well for the final product to have value, then productivity becomes a multiplicative rather than a linear function of skill. A worker who makes slightly fewer errors per task will be dramatically more productive overall, because those small quality gains compound across every step.
This task-based model of jobs has gained fresh relevance with a recent paper by Joshua Gans and Avi Goldfarb , “O-Ring Automation,” which applies Kremer’s framework directly to AI-driven automation. While their model might appear simple at first glance, its implications are far-reaching and profound. At least one of us (Alex) has been obsessed with this paper for months (see here , here , and here ).
Gans and Goldfarb build a model of a firm where each worker’s job is composed of n tasks. The job’s output is multiplicative in the quality of each task—this is the O-ring production function:
A worker has a time endowment h and allocates it across the n tasks. If task s is performed manually, the worker spends h_s hours on it and generates quality:
where a is labor productivity, assumed constant across tasks (a simplifying assumption). The worker's time constraint is:
The firm can also choose to automate any task by renting a piece of capital that delivers a fixed quality ? at cost r per task. This is the key part to pay attention to: whether firms invest in automating a task depends on the trade-offs embedded in this problem. Once a task is automated, the worker no longer needs to spend any time on it.
So far the setup is quite simple. The interesting part is what the multiplicative structure of the production function implies once automation enters the picture.
How can automation raise wages?
Now suppose a firm chooses to automate k out of n tasks. What happens to the worker, and how does that affect the wage?
Before automation, the worker allocates time evenly across all n tasks, which is optimal given the symmetric structure. Each manual task therefore receives h/n hours and has quality a · h/n . Total output is:
After k tasks are automated at quality ? , the worker now has all h hours to allocate across only n - k remaining manual tasks. Each manual task now gets h/(n-k) hours, producing quality a · h/(n-k) . Total output becomes:
So output rises after partial automation if and only if:
This is an important condition which states that if the automated task quality ? is at least as good as the worker’s original pre-automation manual quality on those tasks, then the output increases for sure. Output does not automatically rise just because some tasks are automated; it rises when the quality of automation is high enough.
But here is the key insight: because automation also frees the worker to concentrate more time on the remaining tasks, output can increase even if the automated tasks are performed at slightly lower quality than the worker originally achieved before automation. Automation lets the worker concentrate on fewer tasks, raising the quality of each one. This is the “focus effect .” Because of the functional form of the production function, higher quality on the remaining manual tasks doesn’t just add to output—it multiplies through the production function. The worker becomes more productive precisely because they’re doing fewer things.
When the automation quality is sufficiently high relative to what the worker was producing manually on those tasks, the worker’s marginal product rises—and so (typically) does their wage. Partial automation, in the O-ring world, is often a complement to human labor rather than a substitute for it, which increases the worker’s wage.
But this is not necessarily good news for labor
Higher worker productivity is good for wages, but does it lead to more jobs or fewer? This depends on consumer demand. Each worker makes one calculator a day and the firm has 10 workers. All calculators are sold at the prevailing price. Now imagine each worker becomes much more productive so that each worker can make 10 calculators. The price of each calculator falls (costs fall), but consumers still demand roughly the same number of calculators. This is the case of inelastic demand —one that does not respond much to prices. Now the firm will fire 9 of the workers. But what if consumers buy way more calculators at lower prices, i.e., demand is very elastic . Then the firm will actually end up hiring more workers to meet the new demand, despite the fact that they’re more productive.
More generally, if demand is elastic (elasticity > 1), then a price decrease leads to a more-than-proportional increase in quantity demanded. Output expands a lot. The firm needs more workers to produce this higher output, even though each worker is now more productive . Net effect: more hiring.
If demand is inelastic (elasticity < 1), a price decrease leads to a less-than-proportional increase in quantity demanded. Output does not expand much and the firm can produce the same (or slightly more) output with fewer workers since each one is more productive. Net effect: displacement.
This is closely related to a popular idea commonly referred to as Jevons’ paradox : when a resource becomes more efficient to use, total consumption of that resource often increases rather than decreases. When the steam engine made coal more efficient, coal consumption skyrocketed because so many new applications became economically viable. The same logic applies to labor: if AI makes a worker dramatically more productive, and demand for that product is elastic, one may end up with more workers in that occupation, not fewer.
Why job dimensionality matters: The case of firm incentives
The relationship between tasks and the elasticity of consumer demand is an important dimension for predicting AI-driven displacement, but one variable that is often overlooked is the number of tasks in the job itself, i.e., its dimensionality. A job’s dimensionality matters for two reasons.
First, conditional on a task being automated, a low-dimensional job is more likely to be fully displaced. If a job has 20 tasks and one gets automated, a human worker is still required to do the other 19 tasks. But if a job has one task and one task gets automated, that job is gone. Second—and this dimension is perhaps overlooked the most—organizations have a stronger incentive to automate tasks the fewer non-automated tasks are left in the job. Imagine that automating a task requires a $10 million dollar investment (buying the software, onboarding, connecting it to the rest of the system, etc.). In one case, this task is the only non-automated task left in a job; in the other case, if this task is automated, there are 19 other non-automated tasks left. The firm has a much higher incentive to automate the task in the first case than the second because it can then replace the worker and reap the cost savings involved.1
Because of this, firms have a stronger incentive to invest in technology to automate low dimensional jobs. In a low-dimensional job, automating all or most of the core tasks can eliminate the position and the wage bill altogether. That makes the return to automation much larger. In other words, not all “unexposed” tasks matter equally: in some jobs the remaining tasks still keep the existing worker at the firm; in others they do not.
This gives a clear prediction: even if a job is not currently “exposed” to AI, in the sense that AI is not being used for the tasks involved, if it is low dimensional and the technology is getting close to automating the tasks, it should be considered at risk. Firms will work harder and invest more to automate the task(s) involved than in the case where jobs have many non-automated tasks.
Trucking and warehousing, the overlooked canaries in the coal mine
This is why we think people should be more worried about jobs like trucking and warehousing.
Roughly 3 million Americans drive trucks for a living . Many are in their 50s, have been driving for decades, and live in communities where trucking is an economic backbone. Trucking is one of the best jobs one can get without a college degree. The actual work of a long-haul truck driver is dominated by a few core functions: moving the truck safely from point A to point B. The logistics, loading/unloading, etc. are all done by others. If autonomous driving becomes reliable on long-haul routes, the job of a truck driver is not just being augmented; it is fundamentally threatened and may even be displaced entirely. And that possibility is no longer theoretical. Companies such as Aurora Innovation and Kodiak Robotics are already running large-scale autonomous trucking pilots and commercial deployments on constrained routes. Warehousing tells a similar story. Warehousing employs millions of U.S. workers , and many warehouse jobs—picking, packing, sorting, pallet movement—are relatively narrow and increasingly automatable. Abroad, firms are already operating highly automated “dark warehouses” that run around the clock with minimal human labor. These warehouses look nothing like what we see today: they are designed from the ground up to be run by machines.
Now compare that to a knowledge worker, say, a management consultant. The job combines research, data analysis, client communication, presentation design, strategic reasoning, team coordination, and relationship management. That’s at least seven or eight distinct complementary tasks. Claude or Codex might automate the first pass on the data analysis and slide deck creation, but the consultant is still needed for everything. In O-ring terms, automating some tasks can make the remaining ones more valuable by allowing the worker to allocate more time to them—the consultant can spend more time talking to the client and making them comfortable with the implementation, getting buy-in from the various units, etc. As a consequence, wages may rise, and employment may rise too if better output and lower prices expand client demand.
You can see the same logic in many high-stakes professions such as medicine and academia . There are now over 870 FDA-approved radiology AI tools , and 66% of doctors use at least one AI tool, mainly for note dictation and diagnostic support. But these tools are augmenting radiologists and physicians, not replacing them. AI typically handles the routine pattern recognition aspect of the job, freeing doctors to focus on complex cases, patient communication, and clinical judgment. Likewise, academics have been debating whether advances in AI make research assistants more or less valuable. As AI automates routine analytical tasks, both professors and RAs can concentrate more on ideas and judgement, thereby expanding output and demand for skilled research labo r. This is yet again the O-ring focus effect in practice.
What do exposure indices capture?
Let us bring this back to the exposure framework. In the standard approach, a management consultant is highly “exposed” to AI whereas a truck driver is not. But does this mean that the consultant is at higher displacement risk than the truck driver? Not necessarily. The consultant’s high exposure may actually be good news because it means AI will augment many of their complementary tasks, triggering the focus effect and potentially raising wages. On the other hand, the truck driver’s moderate exposure on a single critical task is much more dangerous because trucking companies have a much higher incentive to automate the task of driving, and once that’s done, the job is gone as well. These incentives are already playing out in practice:
The relevant object therefore is not average task exposure, but the structure of bottlenecks and how automation reshapes worker time around them. Two jobs with identical exposure scores can have completely opposite displacement risks depending on whether their tasks are complements, whether demand for their output is elastic or inelastic, and the incentives of the firm to invest in automation. The workers at greatest risk are not necessarily those with the highest average exposure, but those whose jobs are built around a small number of core tasks that AI can automate.
1 In the case where jobs are not fully automated, the cost savings from automating the marginal task will depend on the complementarities between the other tasks in the job. The exact relationship is worked out in the O-ring model of automation paper.
Alex Imas is a professor at UChicago Booth. Doing research on Economics and Applied AI. Substack here .
Tyler Durden
Sat, 04/04/2026 - 09:20 Close
Sat, 04 Apr 2026 12:45:00 +0000 Netanyahu Boasts 70% Of Iran's Steel Production Capacity Destroyed
Netanyahu Boasts 70% Of Iran's Steel Production Capacity Destroyed
Israeli Prime Minister Benjamin Netanyahu stated in Friday remarks that Israeli airstrikes have wiped out roughly 70% of Iran's steel production capacity, dealing a
Read more.....
Netanyahu Boasts 70% Of Iran's Steel Production Capacity Destroyed
Israeli Prime Minister Benjamin Netanyahu stated in Friday remarks that Israeli airstrikes have wiped out roughly 70% of Iran's steel production capacity, dealing a major blow to its ability to manufacture weapons - from missiles and drones to ships.
"Together with our American friends, we continue to crush the terror regime in Iran. We are eliminating commanders, bombing bridges, bombing infrastructures ," Netanyahu began in a video statement.
Illustrative image, via Steel Radar
"In recent days, the Air Force has destroyed 70% of Iran's steel production capacity," he added. "This is a tremendous achievement that deprives the Revolutionary Guards of both financial resources and the ability to produce many weapons ."
But we should also add that this appears part of the Israeli strategy to bring about government and societal collapse , something Netanyahu has at times been more out in the open about.
Israel was the first to begin attacking Iranian energy infrastructure, having hit Pars gas field last month - an action which the White House distanced itself from.
What has become clear is that Iran's two largest producers - Khuzestan Steel Company and Mobarakeh Steel Company - have both been knocked offline after repeated US-Israeli strikes, with officials warning it could take months to restore operations , and that's assuming this can be done even as the bombs still rain down.
President Trump has meanwhile warned that Washington has yet to begin "destroying what's left" of the Islamic Republic's infrastructure .
Major bridges have already been taken out, and even medical and pharmaceutical complexes, along with instances of deadly attacks on schools.
But for each escalation on Iran's infrastructure, the IRGC has been hitting back at Israeli and Gulf sites in kind. This has even included reportedly attacking American tech companies based in the Gulf.
Tyler Durden
Sat, 04/04/2026 - 08:45 Close
Sat, 04 Apr 2026 12:10:00 +0000 Poland: Pedophilia, Bestiality Scandal Hits Tusk's Party
Poland: Pedophilia, Bestiality Scandal Hits Tusk's Party
Poland: Pedophilia, Bestiality Scandal Hits Tusk's Party
Via Remix News,
The Klodzko scandal could bring down the Civic Coalition (KO).
This is the view of PiS candidate for prime minister, Przemyslaw Czarnek, despite the localized nature of the crime.
“This is a group of people who really have a lot on their minds,” the politician says.
A pedophilia and zoophilia scandal in the Lower Silesian Voivodeship has shocked Poland. Przemyslaw L., 45, was sentenced to 25 years in prison for sexual offenses committed against underage girls, bestiality, and recording these acts on film and in photographs.
According to Do Rzeczy , his ex-wife, Kamila L., a former Civic Platform activist, was sentenced to 6.5 years in prison for failing to provide assistance to her minor daughter from a previous relationship, who was a victim of rape, and for complicity in animal abuse.
Przemyslaw Czarnek, the PiS candidate for prime minister, commented on the shocking case and its possible political consequences on Telewizja Republika on Wednesday.
“This is a very serious scandal that will, in my opinion, sink the Civic Platform. I spoke about the Civic Platform and their absolutely scandalous behavior three years ago , when there was a debate on the vote of no confidence in me. And I shouted from the parliamentary podium that these people should be feared, because these people from the Civic Platform, the mayors of cities from the Civic Platform, finance associations and organizations with enormous public funds—over a billion zloty a year—that simply deal with dramatic issues,” said the former Minister of Education and Science.
“I mentioned programs that were simply perverted by their very name, ” he added.
As Czarnek pointed out, “this is a community of people who really have a lot going for them, financing these kinds of communities that commit these kinds of shameless, dramatic, criminal, anti-human actions against children, and against animals as well, because we are dealing with zoophilia there as well.”
Politicians from the Civic Coalition also commented on the situation.
“It’s difficult to hold someone accountable; it’s a situation that can happen to anyone. Anyone can have a neighbor like that whom they know nothing about until the police and prosecutors get involved,” one Civic Coalition MP told Wirtualna Polska.
The interviewees emphasize that the case involves a former Civic Coalition (KO) activist and a very low-level figure. The police and prosecutors acted, and the perpetrators were brought to justice, so it’s difficult to speak of the scandal’s political context. “It’s a local issue, perhaps also highlighted by local disputes between the mayor and the Civic Coalition,” notes the Civic Coalition politician.
Word has surfaced that Prime Minister Tusk is offering clarification.
“It’s more likely at the local level, not the central level, not from Deputy Marshal Monika Wielichowska; it’s hard to blame her,” says a senior Civic Coalition (KO) politician.
Wielichowska supported Kamila L. when she was campaigning for the regional position.
“This is certainly an inconvenient matter for Monika. She’s not handling it well,” the source adds.
Read more here...
* * *
Tyler Durden
Sat, 04/04/2026 - 08:10 Close
Sat, 04 Apr 2026 11:35:00 +0000 Navy's Top Officer Admits Ford Carrier Fire Halted Its Combat Sorties For Two Days
Navy's Top Officer Admits Ford Carrier Fire Halted Its Combat Sorties For Two Days
More details continue to belatedly come out in piecemeal fashion related to the Navy's largest and most expensive supercarrier, the USS Gerald R Ford
Read more.....
Navy's Top Officer Admits Ford Carrier Fire Halted Its Combat Sorties For Two Days
More details continue to belatedly come out in piecemeal fashion related to the Navy's largest and most expensive supercarrier, the USS Gerald R Ford. It has withdrawn from the Iran theatre of operations and Mideast regional waters, now anchored in Croatia (Split) for largescale emergency repairs, after a March 12 fire which the Pentagon has said was non-combat related left some sailors with minor injuries.
New information has been disclosed by no less than the US Navy's top officer. He has described in fresh remarks that the USS Ford was unable to fly sorties for two days due to (the alleged) laundry fire , which took over a full day to extinguish .
US Navy/AFP/Getty Images
CNN has underscored that this marks the "first indication that the blaze hindered combat operations against Iran ." So the incident has been confirmed to have resulted in a complete halt to two days of combat operations against Iran - which is hugely significant given that only two carriers were launching operations at that time (the other was the USS Lincoln). And now the USS George HW Bush is en route across the Atlantic in a scheduled deployment.
Chief of Naval Operations Adm. Daryl Caudle, addressed the Washington-based think tank the Center for Strategic and International Studies (CSIS) on Tuesday. While praising the crew's response to the fire, he stated the following :
"They fought that, put it out, and started flying sorties two days after that, so I’m very proud of that crew," he said.
Caudle described that they ended up battling the blaze - and cleaned up the water damage and fire-fighting substances, for a total of 30 hours .
He also confirmed prior reports of some 600 sailors being displaced from their sleeping quarters due to the damage.
As for the precise cause of the blaze, the last official word was a March 28 statement from 6th Fleet saying, "military and federal civilian law enforcement continued investigations into a fire aboard the ship originating in the ship’s laundry facilities."
This comes amid an avalanche of speculation that the Ford might have been hit by an Iranian missile or drone - but this remains just theorizing and speculation.
It's problems run deeper, Bloomberg writes...
Adm. Caudle did make another important admission in his Tuesday remarks. He said: "The challenge … is how do you buy down risk in other parts of the world while you're focusing a lot of resources in one area ." Already major US military assets have been diverted from southeast Asia, where China's pressure campaign on Taiwan continues, toward the Middle East in relation to Operation Epic Fury.
* * *
Tyler Durden
Sat, 04/04/2026 - 07:35 Close
Sat, 04 Apr 2026 11:00:00 +0000 What Might Transatlantic Security Look Like If The US Leaves NATO?
What Might Transatlantic Security Look Like If The US Leaves NATO?
What Might Transatlantic Security Look Like If The US Leaves NATO?
Authored by Andrew Korybko,
If NATO as a whole remains more or less intact upon the US’ hypothetical exit, and the US then reaches bilateral security deals with Poland, the Baltic States, and Turkiye, then not much would change from Russia’s perspective.
Trump’s latest talk about the US leaving NATO is being taken seriously by many Europeans owing to his rage over their refusal to help him reopen the Strait of Hormuz , not to mention them denying the US access to its own bases on their territory and even their airspace for use in the Third Gulf War .
It’s possible that this is just a bluff, however, to usher in the radical reforms that he envisages and which were described here in connection with a prior report about his supposed “pay to play” plans.
Nevertheless, it’s also possible that he’s indeed serious and that the US will ultimately end up leaving NATO, in which case it’s useful to analyze the future of transatlantic security.
For starters, the headquarters of both EUCOM and AFRICOM are in Germany, and it would be very difficult and inconvenient to relocate them.
Therefore, the US might reach a bilateral security deal with Germany in this scenario, which could set the basis for other such deals with other NATO members.
Such arrangements would likely include terms that are advantageous to the US such as its allies committing 5% of their GDP to defense like has already been demanded of them as well as giving a preference to American companies for military-technical procurement.
The US might also demand that its troops be granted immunity for any crimes that they might commit while based in their allied nation.
Trump could seek to enshrine trade privileges for the US into any security deal too knowing him.
The only countries that would likely agree to such terms are those whose leaders either sincerely fear Russia or manipulate the public on this pretext, thus Poland and the Baltic States for sure, but Finland and Romania can’t be ruled out either.
They and the other NATO members would still enjoy Article 5 assurances amongst themselves, but it’s also possible that larger members like France, Germany, Italy, and/or the UK might follow the US’ lead in making demands of the smaller ones for ensuring this.
In that event, the European security system could fundamentally change, but concerns about Russia exploiting the optics of infighting (even if only for soft power purposes and not by initiating hostilities against post-US NATO) could deter the aforementioned larger members from doing this.
If NATO as a whole remains more or less intact upon the US’ hypothetical exit, and the US then reaches bilateral security deals with Poland and the Baltic States, then not much would change from Russia’s perspective.
The same goes for if the US reaches such a deal with Turkiye, which enjoys pragmatic ties with Russia unlike Poland and the Baltic States but is poised to take the lead in expanding Western influence along its southern periphery through the “Trump Route for International Peace and Prosperity ”.
If the US remains committed to Turkiye’s defense, any potential clash with Russia could risk World War III. If no such deal is reached, however, then Russia might be more proactive in pushing back against Turkish influence there.
All in all, transatlantic security isn’t expected to change much if the US leaves NATO so long as it retains Article 5-like obligations to several of the bloc’s key members, namely Poland, the Baltic States, and Turkiye.
If it doesn’t, then Russia might consider preventive military action against post-US NATO to eliminate security threats emanating from it, but it could be deterred by nuclear-armed France and/or the UK reaffirming their Article 5 obligations to the bloc’s members.
Nothing would really change then.
Tyler Durden
Sat, 04/04/2026 - 07:00 Close
Sat, 04 Apr 2026 03:00:00 +0000 Has Concern Over Hormuz Made Us Forget The Red Sea?
Has Concern Over Hormuz Made Us Forget The Red Sea?
Has Concern Over Hormuz Made Us Forget The Red Sea?
Authored by Gregory Copley via The Epoch Times,
Wartime concerns about the security of maritime energy traffic through the Strait of Hormuz—connecting the Indian Ocean/Gulf of Oman with the Persian Gulf—have overshadowed the fact that the related issue of Red Sea security is far from resolved and is, in fact, becoming more dynamic.
The Red Sea–Suez link between the Mediterranean and the Indian Ocean is of equal strategic importance to global trade as the Hormuz choke point and is, through geography and common players, intrinsically linked with the Persian Gulf conflict.
But it is Ethiopia’s civil war, brewing with different factions and with varying intensity since the coup against Emperor Haile Selassie I in 1974, which is again moving in ways that could prove decisive.
Always, in the background, is the reality that Ethiopia could revive its historical influence over the Red Sea–Suez sea line of communication (SLOC).
Inside Ethiopia, the conflicts that have been raging since 1974 between different governments and different factions are at a new level.
The four different Fano opposition militia groups, representing different areas of the Amhara heartland, have been fighting against the central government of Prime Minister Abiy Ahmed Ali for several years. In early 2026, they came together with a united manifesto of their intentions. This has revived the momentum of the threat to Abiy’s Prosperity Party government.
A statement issued by a united Fano on Jan. 17, 2026 (Tir 9, 2018, in the Ethiopian calendar) noted:
“So that the Amhara struggle may become one, the leaders of the Amhara Fano National Force and the Amhara Fano People’s Organization, through a historic decision that demanded courage, open-heartedness, decisiveness, and trust in the people, have been able to make Fano unity a reality. ... We have designated one leader, one organization.”
Significantly, the leadership of the united Fano all titled themselves as “Arbegna,” a nod to the Arbegnoch, the Patriots, who, under the banner of Emperor Haile Selassie I, fought against the Italian invaders of Ethiopia from 1935 to 1941. This led to the ouster of the Italians at the Battle of Gondar, in late November 1941, the first major Allied victory of World War II, in the ouster of an Axis power (Italy) from territory it had seized.
Today, the result of the four separate Amhara Fano groups fighting against the Abiy government over the past several years was the creation—finally—of the Amhara Fano National Movement (AFNM) as an umbrella for all civil and military operations. AFNM, however, described itself as working on behalf of all Ethiopians desirous of the restoration of the multi-ethnic empire. (Ethiopia is home to some 80 ethnic and linguistic groups.)
Prime Minister Abiy, half-Amhara and half-Oromo, has consistently identified with Oromo causes and first fought against a Tigrean-dominated government of Ethiopia, and then against the Tigrean People’s Liberation Front (TPLF) militia, which was forced into a ceasefire—essentially a military surrender by the TPLF—in November 2022.
Abiy’s Prosperity Party government has increasingly been rejected by his original Oromo militant supporters, who regard him as “insufficiently Oromo” in outlook, and the government’s writ—or its area of focus—now rarely extends beyond the capital, Addis Ababa. The exception for Abiy’s travels is to some major projects such as the Grand Ethiopian Renaissance Dam in the Benishangul-Gumuz Region of western Ethiopia. The dam has been the subject of some hostility from Egypt, which sees its existence as infringing on Egypt’s “right” to control the waters of the Blue Nile, even though they originate in Lake Tana in the Amhara Highlands of Ethiopia, outside Egypt’s territories.
The AFNM designated its first chairman as Arbegna Zemene Kasse, and its military commander as Brigadier General Tefera Mamo.
Meanwhile, Abiy’s government has become increasingly dependent on support from the governments of the United Arab Emirates, Saudi Arabia, and, to an extent, Turkey and the PRC, each of which has a strong interest in dominating the Red Sea–Suez sea line of communication.
To a key extent, Abiy has focused on modernizing the capital, Addis Ababa—which now resembles a Dubai skyline—but has less control over the broader hinterland of Ethiopia.
At the same time, the government of Egypt is working to support various Ethiopian regional independence groups to destabilize Ethiopian control of the Blue Nile waters, which Egypt claims are critical to its national security and economic well-being. Egypt has maintained an on-and-off war approach to Ethiopia since the late 19th century and lost several major military confrontations with Ethiopia during the late 19th century. All of the supporting nations, as far as Abiy is concerned, also have interests that are inimical to Ethiopia’s revival of Red Sea influence.
It is important to note that Abiy has consistently ensured there is very little foreign news reporting from Ethiopia, which has had the positive benefit for the government that the civil wars, and the massive loss of life, have not been widely known around the world.
On the other hand, it has also prevented international investor and tourism interest in the country.
Now, Turkey, in particular, is vying for control of the region. It now actively controls the Somalian government and uses Somalian coastal territory for its military testing of ballistic missiles, among other things. It was particularly hostile to Israel’s diplomatic recognition of independent Somaliland, on the Red Sea coastline, in late December 2025.
Internally, in Ethiopia, the AFNM has been speaking—in its initial unity document—about representing the interests of all Ethiopian ethnicities and regions, not just the Amhara people and regions. It has been gathering significant military momentum, with additions to its ranks coming from defecting government forces. It did not, however, mention the restoration of Ethiopia’s last constitution from the pre-coup era, given that this was the last democratic reference point for the country.
All subsequent “constitutions” have been designed in the divide-and-conquer mode to keep ethnic groups separate and competitive, keeping various Ethiopian peoples as second-class citizens.
But what the AFNM has failed to do is to address meaningful international support or define the future shape of Ethiopia if it were to attain power. There has been no public discussion of its proposed economic or strategic policies. Only the adoption of the name of the Patriots—the Arbegnoch—gives any indication of its reflection of traditional Ethiopian values or historical Ethiopian geopolitical aspirations, which would include a reunification with Eritrea and the reacquisition of Ethiopia’s traditional Red Sea coastline.
It is significant, however, that Eritrea has been supporting the AFNM groups with arms and other support, and some Tigrean elements from the now-split TPLF have also supported Fano groups.
The AFNM operates freely in Amhara areas close to Addis Ababa and could certainly challenge Abiy’s forces in the capital. The other factor is the reporting that Abiy himself may be closer to the end of his leadership than the start of it. Change may not be imminent, but Abiy is becoming somewhat embattled.
But no wonder the world is oblivious to the wars of the Horn of Africa: The prime minister has consistently kept foreign journalists out of the country.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.
* * *
Tyler Durden
Fri, 04/03/2026 - 23:00 Close
Sat, 04 Apr 2026 02:15:00 +0000 America Dependent On Chinese Electrical Parts For AI Build-Out
America Dependent On Chinese Electrical Parts For AI Build-Out
The race for U.S. leadership in AI is hitting a tangible wall made of steel, copper, and imported circuit breakers . Trillions in planned spending on dat
Read more.....
America Dependent On Chinese Electrical Parts For AI Build-Out
The race for U.S. leadership in AI is hitting a tangible wall made of steel, copper, and imported circuit breakers . Trillions in planned spending on data centers are running up against chronic shortages of transformers, switchgear, and batteries, the unglamorous gear that actually delivers power to the racks.
Domestic production has not scaled anywhere near fast enough, leaving developers with little choice but to lean on overseas suppliers, predominantly from China . The result is lengthening lead times that threaten to push back or cancel projects already baked into corporate budgets and national strategy.
Bloomberg reports electrical equipment, though a small slice of total project costs, is the component that can bring everything to a halt . Their leading example is the massive facility under construction in Abilene, TX, expected to draw as much as 1.2 gigawatts once it serves OpenAI.
For comparison, that's more energy than a Westinghouse AP1000 reactor can provide ...
We previously pointed out exactly this vulnerability back in August 2025 when Wood Mackenzie sounded the alarm on transformer shortages. The consultancy projected demand would exceed supply by 30 percent that year alone, with U.S. manufacturers able to cover only a fraction of needs and roughly 80 percent of units imported. We warned then that the AI boom was colliding with a grid already buckling under failed green policies and surging electricity loads , a dynamic that has only intensified since.
In January, we highlighted America’s aging power infrastructure , showing how data-center demand is now a measurable slice of national consumption and exposing decades of underinvestment that no amount of policy rhetoric can paper over.
The current administration is doing what they can to try and ensure costs are not passed on to household consumers, with the recent agreement made between the White House and some of the biggest hyperscalers. But with news from Constellation that no matter how hard new energy generation is pushed onto the grid, long connection queues will destroy any possibility of the national grid finding balance .
Tyler Durden
Fri, 04/03/2026 - 22:15 Close