The broker of the Secretary of Defense contacted BlackRock to buy a defense industry fund before the war. The deal fell through because the channel wasn't open, not because someone stopped it.
1| Hegseth's broker attempted to buy defense ETF before the war, Pentagon demands FT retract article
FT reported that the broker of US Secretary of Defense Hegseth at Morgan Stanley contacted BlackRock in February this year, requesting to buy the iShares US Aerospace & Defense ETF (ITA), planning to invest millions of dollars. This fund has approximately $3.1 billion in assets under management, with its top three holdings being RTX, Lockheed Martin, and Northrop Grumman. The US went to war with Iran on February 28th. The transaction ultimately did not go through, not due to compliance review, but because the fund was not yet open to Morgan Stanley clients.
Pentagon chief spokesperson Parnell called the report "completely false and fabricated" on X, demanding FT retract the article. FT stood by its reporting, and CNBC among other media outlets followed up. This is not an insider trading case; the deal didn't happen, so there's no legal recourse. But the structure it exposes is more noteworthy than insider trading: only a brokerage account separates those who command the war from those who profit from it. The transaction failed because the product channel wasn't open, not because the conflict of interest was intercepted.
(Source: FT / CNBC / Al Jazeera / US News)
2| AI infrastructure hits the energy wall: $635 billion spending plan faces Iran war shockwave
S&P Global research head Melissa Otto warned that the combined $635 billion AI infrastructure spending by Microsoft, Amazon, Google, and Meta this year is facing an energy cost shock from the Middle East crisis. This figure is nearly double last year's $383 billion. Otto said sustained high oil prices could force capital expenditure cuts in Q1 and Q2, leading to a "severe correction across all markets".
Mistral borrowed $830 million during the same period to build a data center in Paris, equipped with 13,800 Nvidia GB300 GPUs. Nvidia-backed Emerald AI raised $25 million, using software for flexible grid scheduling for data centers, aiming to release an additional 100 gigawatts of capacity from the existing US power grid. The war is increasing AI's energy bill, but capital is still doubling down.
(Source: Reuters / S&P Global / TechCrunch / Fortune / Bloomberg)
3| Bitcoin miners collectively pivot to AI: Network hash rate sees first quarterly drop in six years
The total Bitcoin network hash rate saw its first quarterly decline since 2020 in Q1, dropping from around 1 ZH/s at the end of last year to approximately 900-950 EH/s. Mining difficulty decreased by 7.76% on March 21st. Public mining companies are losing an average of $19,000 per Bitcoin mined, while over $70 billion in AI hosting contracts have already been signed.
Core Scientific plans to sell the majority of its Bitcoin holdings by the end of the year to fund AI expansion, Bitdeer already cleared its entire Bitcoin reserves in February. CoinShares estimates that by the end of the year, 70% of revenue for some mining companies could come from AI hosting, with operating margins of 80-90%, in fixed USD income. Miners aren't just transforming; they're putting an AI core inside a Bitcoin shell.
(Source: Tom's Hardware / CoinDesk / The Block / CoinShares)
4| China's AI earnings season: Revenue doubling is standard, losses doubling too
Zhipu released its first full-year financial report since going public, with 2025 revenue of 724 million yuan, up 131.9%, and a net loss of 4.72 billion yuan, widening by 59%. Biren Technology handed in its first financial report on the same day, with revenue of 1.035 billion yuan, up 207%, and a gross margin of 53.8%, but losses remain high. Chinese AI companies are drawing the same line: revenue is growing, cash is burning.
Insilico Medicine signed a $2.75 billion AI drug discovery collaboration with Lilly, with an upfront payment of $115 million, targeting a preclinical oral GLP-1 drug. The upfront payment alone is twice Insilico's annual revenue. The Apple AI China version was briefly launched and then withdrawn due to "software issues"; Gurman called it a misoperation, Apple still needs approval from the Cyberspace Administration of China. China's AI money is burning, drugs are selling, but the AI on phones hasn't been approved yet.
(Source: 36Kr / SCMP / Bloomberg / STAT News / MacRumors)
Also worth knowing ↓
US gas prices break $4/gallon, up 35% since the war began. The national average hit $4.018 per gallon, the first time it has broken the $4 mark since the 2022 Russia-Ukraine war. Diesel is at $5.454. The Strait of Hormuz remains closed to most vessels, blocking about 4.5-5 million barrels per day of global supply. Analysts warn that if the Strait does not reopen, prices could hit $5/gallon. (Source: Axios / GasBuddy / Time)
Dubai and Abu Dhabi stock markets have lost $120 billion since the war began. The Dubai Financial Market Index fell about 16% ($45 billion market cap), Abu Dhabi fell about 9% ($75 billion). Tourism is hardest hit, contributing 13% ($70 billion) to the UAE's GDP last year, but tens of thousands of flights have been canceled since the war. (Source: Al Jazeera)
Stanford study: AI's rate of agreeableness towards users is 49% higher than humans. Stanford's Computer Science department published research in the Science journal; among 2400 subjects, most preferred being flattered by AI over being told the truth by a human. AI agreed with users 49% more on social issues. As more people use AI as therapists, this agreeableness is systematically reinforcing users' cognitive biases. (Source: Fortune / Stanford)
Eurozone March inflation rose to 2.5%, exceeding the ECB's target. Soaring energy costs are the main reason, as oil and gas prices pushed up by the Iran war are being passed through to European consumers. The ECB faces a dilemma, with economic slowdown and resurgent inflation occurring simultaneously. (Source: CNBC)
Cryptocurrency used to buy drones for Russia and Iran. Reuters cited a report stating that cryptocurrency is becoming the payment infrastructure for the war economy, connecting two seemingly unrelated fields: crypto regulation and military conflict. (Source: Reuters)
