Whenever a new political deadlock paralyzes Libya or localized clashes between powerful rival militias break out on the streets of the capital Tripoli, the global policy establishment dusts off its favourite phrases: “failed state,” “security vacuum,” and “primordial tribalism”. This lexicon serves a very specific purpose. By framing Libya’s fragmentation following the fall of the previous regime of Muammar Qaddafi as an inevitable product of native institutional incapacity and ancient internal feuds, the international community achieves a convenient double victory. It blames the victims of the crisis while completely absolving the outside architects of Libya’s ongoing paralysis.

The reality on the ground is far more calculated. Libya is not a broken state suffering from a spontaneous institutional breakdown. It is a highly functional system of “managed chaos” in an undeclared modern theatre of tutelage where a domestic kleptocratic cartel and foreign powers work in tandem to lock the country in a state of permanent instability. This ensures that Libya’s vast sovereign wealth remains easily extractable and its population permanently disenfranchised. To understand how Libya arrived here, we must dismantle the comfortable myths of the post-2011 era and look directly at the raw mechanics of what has become a highly lucrative “Cartel State”—a governance structure where formal state authority is captured by armed groups and political elites or cliques that treat national resources as their own spoils.

The Myth of the Humanitarian Rescue 

The baseline narrative of modern Libya began in 2011 with the NATO-backed intervention under the United Nations’ “Responsibility to Protect” (R2P) doctrine. Framed as a noble rescue mission to save civilians from the security apparatus of the Qaddafi regime’s reported violent suppression of protesters during the 2011 uprising and his explicit threat to ‘cleanse‘ opposition-held cities (much similar to Srebrenica), the R2P intervention was framed as a triumph of global moral conscience. In practice, it was a geopolitical bait-and-switch. 

Once the regime collapsed, the international coalition did not stick around to help; Libya was in a fragile situation beset by a security vacuum and the mushrooming of armed militias. The coalition here could have shepherded the country toward a viable sovereign transition. Instead, they packed up leaving behind a structural vacuum that was immediately hijacked by regional capitals. Far from safeguarding the Libyan people, this selective intervention turned the country into a testing ground for foreign weapons and proxy ambitions. Regional powers such as Turkey, the UAE, and Russia used Libya as a laboratory for advanced drone warfare and the deployment of mercenaries like the Syrian fighters and the Wagner Group to project influence without the political cost of direct state-on-state confrontation.

Sovereignty was reduced to a conditional luxury dependent entirely on how local well-armed actors aligned with the strategic desires of outside capitals. Today, this manifests in a state of soft occupation where thousands of foreign mercenaries from Russian paramilitary networks to Turkish-backed forces and external intelligence agencies permanently dictate the security landscape. The mechanics of occupation via mercenaries in Libya function as a privatized multi-layered system where foreign patrons outsource their strategic ambitions to local Libyan militias and foreign combatants. This creates a soft occupation where state sovereignty is effectively bypassed by these entrenched networks.

The Mechanics of the Cartel State

This artificial environment of managed instability birthed a predatory domestic model: the Cartel State which capitalized on decoupling the country’s current legislative and executive bodies from popular representation. Libya has experienced a decade-long political impasse where un-elected transition-era leaders entrenched themselves as permanent fixtures prioritizing the protection of their own power and financial interests over the democratic mandate of a populace that has not had the opportunity to vote for its representatives since 2014.

The major political factions locked in a power play are the Tripoli-based internationally-recognized Government of National Unity (GNU) and the eastern-based House of Representatives (HoR) and its Government of National Stability (GNS) in alliance with the Khalifa Haftar-led Libyan Arab Armed Forces (LAAF, a.k.a. Libyan National Army) maintain a loud superficial theatre of ideological warfare. Behind closed doors, however, they share a deep mutual interest in preserving the status quo. By keeping the country divided, these elites can indefinitely postpone national elections while monopolizing the state’s financial pipelines.

This profound lack of democratic legitimacy has incentivized these entrenched factions to treat the state’s finance and monetary institutions as a prize to be seized and the true nature of this arrangement was laid bare during the explosive 2024 political warfare over the Central Bank of Libya (CBL).    

When the Government of National Unity and the Presidential Council, without the approval of the House of Representatives, forcefully removed  the Central Bank governor, Sadiq al-Kabir, who had previously restricted government spending by blocking out-of-budget expenditures, this triggered a retaliatory oil shutdown by eastern factions exposing the fundamental truth of the Libyan crisis: the state is not “failing” but is being actively fought over as a financial prize—a vast, state-managed oil and gas reserves coupled with a highly centralized financial control over these revenues. This makes the Central Bank and the National Oil Corporation (NOC) the ultimate keys to the treasure enabling whoever controls them an almost complete monopoly and control over the nation’s wealth without the need for taxation or popular consent as the case with rentier economy.

The international community working through the United Nations Support Mission in Libya (UNSMIL) swooped in not to implement a democratic resolution but to broker another elite power-sharing deal over bank leadership. UNSMIL mediated a narrow deal between rival political elites to resolve the 2024 CBL crisis, therefore, effectively restarting the broken status quo by allowing competing factions to carve up the bank’s leadership and board positions among themselves. They managed the crisis just enough to get the oil flowing back to international markets while leaving the kleptocratic structure completely intact. 

By treating the CBL crisis as a technical issue that could be managed via board appointments, the international community avoided the difficult work of addressing how Libya’s political economy actually functions. They achieved the immediate objective of oil flowing back into international markets, but they did so by reinforcing the power of the exact same actors who had caused the crisis in the first place. This implied that the next crisis is merely a matter of time.

This systemic reality was formally confirmed in a March 2026 UN Panel of Experts report which explicitly concluded that Libya’s armed groups have entrenched themselves as the dominant drivers of governance exerting a “coercive and cartel-like control” over the nation’s economic institutions.

Nowhere is this explicit exploitation more visible than in the energy sector. 

Libya sits atop Africa’s largest proven oil reserves, yet, there exists an opaque production-sharing agreement bypassing competitive bidding. State-sanctioned fuel smuggling networks and deliberately convoluted central bank letters of credit systematically divert billions in subsidized fuel to foreign markets allowing entrenched political and militia factions to siphon off national wealth while maintaining a veneer of institutional legitimacy enriching an oligarchic elite and their foreign sponsors. 

The Libyan people, meanwhile, are reduced to price-takers in their own land. Following successive central bank devaluations of the dinar, citizens endure runaway inflation, chronic electricity blackouts and critical cash shortages. While billions of dollars in oil revenues (As of June 2026, Libya’s crude oil production has reached approximately 1.49 million barrels per day) flow through a centralized pipeline directly into the hands of the cartel, ordinary Libyans plunge into artificial poverty. 

Following the Central Bank’s 14.7% devaluation of the Libyan dinar in January 2026, inflation has surged into the double digits reaching approximately 14% by mid-year. This economic strain is compounded by a sharp increase in the cost of essential goods with the national Minimum Expenditure Basket (MEB) spiking by over 10% in April 2026 alone further eroding household purchasing power amidst chronic cash shortages at banks and ATMs. This is a highly sophisticated transnational extraction racket operating under a veneer of international diplomatic legitimacy.

De-exoticizing the Social Fabric

When international observers try to explain this breakdown, they invariably fall back on Orientalist tropes, pointing to Libya’s “tribal nature” as the fundamental barrier to a modern democratic state. This analysis fundamentally misreads Libyan society. Traditional kinship structures and local social networks are not primitive relics causing state failure. 

Historically, they have been the literal bedrock of societal resilience. When the centralized state collapsed in 2011, it was these organic local networks functioning through deeply embedded codes of collective liability and conflict mediation that prevented total societal dissolution. The tribe in Libya has historically acted as a conscious civic shield against centralized authoritarian overreach and foreign occupation. These structures, most notably the Wisemen and Elderly and Notables Councils that emerged nationwide, stepped in to act as the primary authorities in the absence of a functioning judiciary and adjudicated everything from property disputes to blood feuds. 

In the Nafusa Mountains, regional councils successfully mediated complex inter-tribal tensions between groups like the Mashahiya and Zintani that the central government could not reach. Meanwhile, in Libya’s neglected south, social councils unified their communities to provide basic services where infrastructure had disintegrated. These grassroots initiatives demonstrated that even as the formal state apparatus failed, Libyans utilized deeply embedded social frameworks to prevent total societal dissolution. 

However, we must draw a sharp line between this authentic socially cohesive fabric and the opportunistic armed groups dominating the current landscape who inverted the state into an upside-down relationship: Whereas the government should command the security forces, the security forces in the new Libya were dictating to the government how it should perform, ensuring that any political arrangement is contingent upon their approval and continued access to state wealth. 

It needs to be highlighted that the militias running rackets in western regions, particularly Tripoli, or controlling smuggling routes in the margins are not “tribal warriors”. They are hyper-modern mercantile appendages of the Cartel State itself. When they wear tribal names, they do that purely as camouflage to mask raw economic predation and racketeering. By labelling these heavily armed state-subcontracted criminal networks as “tribes,” or considering them representatives of regions, ethnicities or cities, the international community perpetuates a harmful narrative that blames indigenous culture for a political crisis that was manufactured by an international security vacuum.

The Strategy of Institutional Bypass

For years, the international community’s approach to fixing Libya has focused on top-down elite-driven deals. UNSMIL, currently under the leadership of Special Representative of the Secretary-General (SRSG) Hanna Tetteh, has effectively transitioned from an objective mediator into a manager of the status quo convening endless dialogues, structured or otherwise, to shuffle the same discredited political cards. These processes are bound to fail because they ask the very members of the cartel to sign their own political death warrants.

The failure of international mediation in Libya stems from a flawed mental image that reduces the nation to a negotiable corporate project. Since 2011, it has been defined by a series of top-down UN-led initiatives that have struggled to gain traction in a landscape of deep political fragmentation and foreign interference. Following the 2011 NATO intervention, UNSMIL was established to guide the transition, but these efforts often suffered from a lack of local ownership and a failure to meaningfully include civil society. Landmark attempts at consolidation such as the 2015 Skhirat Agreement Libyan Political  (LPA) ultimately resulted in elite power-sharing arrangements that failed to achieve public legitimacy or resolve the country’s institutional divides. 

In recent years, diplomacy shifted toward a “three-track” approach to address political, military and economic issues, yet as  analysts observe, these processes have frequently been undermined by the competing geopolitical agendas of external actors and the influence of entrenched armed groups. Consequently, international mediation has often been criticized for prioritizing quick-fix political formulas over the inclusive, Libyan-led reconciliation necessary to build sustainable, long-term stability. 

Rather than treating Libya as a society with deep-rooted needs, mediators frequently operate on a transactional logic viewing the country as a set of power maps to be rearranged by elite deal-making. This approach treats the state as a business to be restructured and its people as secondary details assuming that stability can be achieved simply by dividing power and resources between competing factions. 

Massad Boulos, Senior Advisor to U.S. President Donald Trump on Arab and Middle Eastern Affairs, has proposed an initiative that epitomizes this transactional failure by treating Libya as a corporate puzzle to be solved through elite power-sharing rather than a sovereign nation. The plan proposes a multi-year transition to unify state institutions centred on a deal between the Dbeibah and Haftar families, notably involving Ibrahim Dbeibah and Saddam Haftar. Ibrahim Dbeibah is national security advisor to his uncle, Prime Minister Abdelhamid Dbeibah. He plays a central role in the administration of the western-based Government of National Unity. Saddam Haftar is the Deputy General Commander of the eastern-based Libyan Arab Armed Forces (LAAF. a.k.a. the Libyan National Army (LNA)). His importance and role stems from him being the son of Field Marshal Khalifa Haftar, commander of the LAAF. Saddam is widely viewed as a successor to his father and a key player in U.S.-backed efforts to unify the country’s leadership. 

Against this backdrop of entrenched domestic rivalry, international efforts to ‘fix’ Libya have shifted toward transactional economy-first initiatives such as the so-called unified budget, control over oil revenues and security coordination via AFRICOM that reduces the state to a negotiation between armed and financial stakeholders. 

While Boulos continues to press his framework with considerable vigour, the initiative is encountering firm resistance. Armed and political groups in Misrata and elsewhere as well as radical Islamists and the head of the Presidential Council have denounced the proposal as a ‘forced marriage’ imposed upon Libyans and as a threat to the democratic process. 

Yet, such objections warrant more than just caution. The invocation of democratic principle here functions less as a genuine defence of the public good than as a rhetorical shield deployed by actors who fear that an accommodation between the Dbeibah and Haftar camps would marginalize them and strip away their access to power, position and resources.

Framing the contest as one between military rule and democracy, therefore, oversimplifies the complexity of what is at stake. What is unfolding is not a struggle over the character of the political order but a struggle among entrenched networks over their place within it. These factions are, in effect, signalling that any settlement which does not retain them at the centre of the emerging architecture constitutes a threat to their interests. Consequently, the language of democracy is being appropriated to defend positions of privilege entrenching divisions rather than fostering the reconciliation any durable settlement would require.

More importantly, this top-down corporate-style restructuring bypasses the Libyan people entrenching elite influence while ignoring the fundamental need for institutional legitimacy and grassroots consensus. Through a de-colonial lens, it becomes evident that international initiatives such as those currently attributed to U.S. presidential advisor Massad Boulos are rooted in a structural “mental image” that treats Libya as an object of negotiation rather than a sovereign nation. By operating on the logic of corporate restructuring rather than inclusive national reconciliation as a pre-condition for state-building, these interventions systematically undermine the prospects for sustainable peace.

Libya’s history since 2011 has shown that such top-down deals which ignore the complexities of Libyan society and the necessity of institutional legitimacy—as seen in the power-sharing deals based on the 2015 Libyan Political Agreement (LPA) establishing the Government of National Accord (GNA) as well as the establishment of the current Government of National Unity (GNU) through the UN-led Libyan Political Dialogue Forum (LPDF)—fail to resolve the crisis. 

By prioritizing the interests of factional power brokers over the construction of a sustainable state, these interventions treat sovereignty as a negotiable item and transform political discourse into a competition for government seats rather than a pursuit of justice. Consequently, local elites often succumb to opportunistic justifications shifting their principles to align with whatever external deal promises them a share of influence. 

Ultimately, this “deal-making” mindset ignores the Libyan collective memory; there is a fundamental crisis that exists because of the people’s distrust in the political process and the lack of legitimacy in the militias who cling to power at any cost.

By focusing on balancing armed and financial powers, international mediation risks turning peace efforts into fuel for future conflict. True stability cannot be manufactured through external blueprints but rather through a national project built on institutional authority and societal consensus rather than the temporary and exclusionary distribution of power.

Transformative stability will never be delivered by the current political apparatus. It must be claimed from below through an aggressive strategy of “institutional bypass”: Since the centralized state is thoroughly compromised, a coordinated civic mobilization must bypass the corrupt political centre and systematically activate local governance structures. Currently, elected Libyan municipal councils possess an organic legitimacy that the central cartel can never buy despite some exceptions. By shifting the focus of administrative and financial accountability to the local level and demanding the direct decentralized management of oil revenues to municipalities, the oxygen feeding the proxy system can be cut off. Without centralized funds to distribute to their armed appendages, the cartel’s leverage collapses.

To turn this resistance into a permanent national framework, a strategic alliance between parallel localized networks and emergent non-factional political parties must champion four non-negotiable pillars:

• Convene a Constituent Assembly: A transparent bottom-up process to draft an indigenous social contract that guarantees equitable decentralized wealth distribution.
• Establish a Unified National Democratic Agenda: Political organizing driven by programmatic parties focused on national cohesion explicitly rejecting zero-sum elitist power-sharing deals.
• Enforce the Exit of All Foreign Forces: Unifying civic and political pressure to demand the immediate unconditional expulsion of all foreign troops and mercenary structures.
• Institutionalize Direct Referendums: Returning veto power to the Libyan street by forcing direct public votes on critical macroeconomic and constitutional decisions.

Reclaiming the Future

While some critics dismiss the use of constitutional tools such as representative assemblies and referendums as an uncritical adoption of Western Westphalian state models, this view is misguided. Rather than an ideological surrender, employing these mechanisms is a form of strategic capture allowing for the reclamation and redirection of the state’s machinery toward genuine sovereign objectives. 

By anchoring these tools within local social realities and community consent, the formal legal structure is stripped of its top-down imperialist baggage and repurposed as a defensive shield to protect Libyan sovereignty from external predation. Sovereignty is not an international grant distributed by foreign capitals or UN envoys but a right to be reclaimed. The most urgent task facing the country’s civic forces is to completely strip foreign “guardians” and domestic kleptocrats of their analytical legitimacy. By casting off the myth of the failed state, Libyans can starve the cartel of its financial oxygen, dissolve the architecture of tutelage and finally become the sole architects of their own destiny.

On March 1, 2026, the European Union issued a carefully worded statement on the U.S.–Israeli strikes against Iran condemning Tehran’s indiscriminate military strikes, expressing solidarity with affected regional partners, and calling for “maximum restraint”. 

The statement was comprehensive in its list of grievances with the Iranian regime—nuclear ambitions, ballistic missiles, proxy networks, human rights abuses—and yet conspicuously silent on the most controversial dimension of the crisis: the question of whether the military operation itself, conducted without UN authorization and aimed at regime change, was compatible with the international law the EU claims to champion. The omission was not accidental. It was a diplomatic contortion born of deep internal division, one that captured, in a single document, everything that has gone wrong in recent years with Europe’s posture in the Middle East.

Anyone who has spent time in Brussels during a foreign policy crisis will recognize the pattern beginning with the emergency video call of foreign ministers, the agonized drafting session that strips every sentence of anything resembling a position, and, finally, the communiqué that arrives too late to matter and says too little to be noticed. The Iran crisis followed this script almost to the letter. But to treat this as just another episode of EU indecision would be to miss something more important. 

The fractured, hesitant European response to the events of 2025-2026 is not an isolated failure of diplomacy but the most vivid symptom of a structural incapacity to act as a coherent geopolitical actor in the Middle East and North Africa. It is an incapacity rooted in institutional design, competing national interests, and an unresolved tension between values and dependence on Washington. The consequences not only extend far beyond the Iran dossier but also erode Europe’s credibility across the entire MENA region, from Gaza to Libya to the Gulf, and leave the EU increasingly marginal at precisely the moment when its engagement is most urgently needed.

From Architect to Bystander: The Collapse of Europe’s Iran Policy

There are few foreign policy issues where the European Union once played a genuinely central and constructive role. Iran was one of the rare exceptions. The diplomatic initiative that ultimately produced the Joint Comprehensive Plan of Action in 2015 began in 2003 as a European project, led by France, Germany, and the United Kingdom—the so-called E3—with the backing of the broader EU. Over twelve years, European diplomats overcame American resistance to engagement, built common ground with Russia and China, and secured a framework of verifiable nuclear inspections endorsed by the UN Security Council. When the deal was signed in Vienna, European leaders could legitimately claim they had given substance to the EU’s aspiration to be a credible security actor on the world stage.

That posture has now collapsed. The trajectory of its undoing is well documented in the Trump administration’s unilateral withdrawal from the JCPOA in May 2018; Europe tried to keep the agreement alive through mechanisms like the Instrument in Support of Trade Exchanges (INSTEX), but these proved largely symbolic—INSTEX took over a year to become operational, and its first transaction, in March 2020, was a shipment of medical goods worth a fraction of pre-sanctions trade. Iran’s progressive escalation of enrichment activities and the E3’s eventual decision in August 2025 to trigger the “snapback” mechanism under UN Security Council Resolution 2231, led to the reimposition of all previously lifted UN sanctions on September 27, 2025 and effectively ended what remained of the deal. By early 2026, European diplomacy on Iran had already shifted from salvage operation to damage control.

The February 28, 2026 beginning of U.S.–Israeli strikes against Iran and the subsequent killing of Supreme Leader Ali Khamenei accelerated this transformation. In a striking break with past caution, European Commission President Ursula von der Leyen publicly called for what she described as a “credible transition” in Iran reflecting the democratic aspirations of its people. EU foreign policy chief Kaja Kallas described Khamenei’s death as opening a path to a different Iran. These were not the words of a bloc neutral on regime change; they were the vocabulary of a Europe that had, at least rhetorically, moved closer to endorsing it.

Yet, this new language masks deep internal fractures. As one Council on Foreign Relations analysis observed, the U.S.–Israeli operation was launched with little to no consultation with transatlantic allies, and European leaders’ responses revealed a continent that remains profoundly divided on questions of military intervention and the use of force. France adopted a legally critical stance as President Macron warned that military action conducted outside international law risked undermining global stability and called for emergency discussions at the United Nations. The United Kingdom pursued a carefully balanced transatlantic posture, combining criticism of the Iranian regime with calls for de-escalation—an approach that satisfied no one at home and invited Washington’s ire. Germany, under Chancellor Friedrich Merz, leaned toward solidarity with the United States while carefully hedging.

The European Leadership Network captured the situation bluntly: While Iran has lost confidence in the EU as the lead implementer of the JCPOA, the new U.S. security strategy regards the EU as something closer to an adversary than an ally, and Israel will hardly turn to Brussels for strategic mediation. What was once Europe’s most significant exercise in “effective multilateralism” has become the stage on which its influence is steadily eroding.

Structural Roots: Why Europe Cannot Act

It is tempting to attribute Europe’s Iran paralysis to the particular circumstances of the moment—the shock of the strikes, the speed of events, or the difficulty of the Trump administration. But the pattern is far older and more deeply embedded than any single crisis. The EU’s inability to project coherent power in the Middle East is a structural condition, not a contingent failure.

The most obvious constraint is institutional. EU foreign policy operates under a unanimity requirement in the Council of the EU that gives every member state an effective veto on sensitive matters. This means that the gap between, say, Ireland’s willingness to champion international law and the Palestinian cause, and Hungary’s reflexive alignment with Israeli and American positions, does not produce a median position. It produces paralysis, or at best, lowest-common-denominator communiqués that list grievances without committing to action. The EU’s March 2026 statement on Iran was a textbook example as a document that catalogued every failing of the Iranian regime while carefully avoiding the central geopolitical question of the war itself.

But the unanimity problem is compounded by something harder to fix—the unresolved competition between national foreign policies and the collective European project. France, with its tradition of strategic independence and its self-image as a balancing power, pursues one logic. Germany, historically committed to deep integration into Western institutional frameworks, pursues another. The United Kingdom, no longer an EU member but still part of the E3 on Iran and a permanent member of the UN Security Council, complicates the picture further. The UK can shape the diplomatic framing while being immune to EU institutional constraints, which tends to pull the collective position in several directions at once. 

And then there are the smaller states—the Czechs, the Austrians, the Irish, the Spanish—each pulling the collective position in different directions for reasons that have as much to do with domestic politics as with any coherent reading of the Middle East. As the European Council on Foreign Relations has observed, there is a profound lack of unity in Europe’s response to challenges in the MENA region, which constantly serves to undermine its efficacy. The EU’s economic ties with the region are substantial, but these links remain devoid of any accompanying strategy that would transform them into political capital.

Underneath all of this sits the most fundamental constraint: transatlantic dependency and the Iran case illuminates this most starkly. Even when Europe took an independent position on the JCPOA after 2018, the stance was, as one analysis published in this journal argued, geared toward keeping the agreement alive while hoping for a change in the U.S. position, potentially under a new president. It was a stopgap measure, not an independent contribution to shaping the regional security environment. Europe’s Iran policy was, in essence, a bet on American elections—a dependency laid bare when the bet was lost, first when the Biden administration’s 2021–22 efforts to revive the deal stalled, and decisively when Trump returned to office in 2025. The Middle East Institute made the point sharply that from Tehran’s perspective, Europe’s credibility was destroyed when the United States unilaterally exited the JCPOA in 2018. The Europeans were left wielding only the stick of sanctions, while the carrots—namely sanction relief and security guarantees—remained entirely in Washington’s hands.

The Gaza Test: A Parallel Failure

The Iran crisis did not emerge in a vacuum. It arrived against the backdrop of another failure that had already severely damaged Europe’s standing in the Arab world: its response to the Gaza war that began in October 2023.

The dynamics were painfully familiar. A Clingendael Institute analysis published in the Cairo Review documented how votes on United Nations General Assembly resolutions on Gaza split the EU member states into three irreconcilable camps. The first, the hardline pro-Israel minority, led by Austria and the Czech Republic, voted against ceasefire resolutions. The second was composed of a moderate majority which gradually moved toward supporting humanitarian pauses. And, the third, a vocal group—Spain, Ireland, Slovenia, Norway—pushed for Palestinian statehood recognition and sanctions on Israel. The EU leaders’ summit in December 2023 failed to agree on any joint statement at all. The European Parliament eventually passed a ceasefire resolution so hedged with conditions—including the dismantling of Hamas—that it effectively legitimized the continuation of the Israeli offensive.

The institutional incoherence was compounded by individual acts that contradicted the EU’s official posture. EU Commissioner Olivér Várhelyi, who oversaw relations with the EU’s neighbors, unilaterally announced the suspension of all EU development aid to the Palestinians after October 7—a solo move reversed only after pushback from the High Representative and several member states. Subsequently, with Commission President von der Leyen’s backing, Várhelyi pushed through the EU’s first-ever funding package for Israel and the Abraham Accords. The Commission, aware of the political sensitivity amid the carnage in Gaza, did not publicly announce the package.

The Clingendael analysis captured the deeper problem: the impulse among a significant segment of Europe’s political elite to align with Israel was driven by a sense of civilizational attachment and historical responsibility, as well as less openly pronounced resentments. Identity politics, the analysis concluded, had trumped both liberal, international-law-respecting foreign policy and interest-based realpolitik. This was not merely a moral failing but a strategic one. Europe’s selective application of international law—vigorous in the case of Ukraine, hesitant in the case of Gaza—did not go unnoticed in the Arab world. The double standard was not subtle; it was broadcast in real time across Arabic-language media for over a year. As the Italian Institute for International Political Studies observed, Europe’s reaction to President Trump’s Gaza plan contrasted sharply with its response to his plan for Ukraine: Europeans praised the former and avoided public criticism, while they mobilized against the latter and immediately produced a counter-plan.

The View from the Region: A Credibility Deficit

How does this diagnosis look from the other side of the Mediterranean?

The short answer is that things are worse than European policymakers seem to realize. The cumulative effect of these failures—on Iran, on Gaza, on Syria and Libya before them—has produced a credibility deficit that is not merely a problem of perception but also a material erosion of diplomatic leverage at a time when the regional order is being rewritten.

The Carnegie Endowment for International Peace described Europe’s position on the Iran war in devastating terms when it said that Brussels had slipped into a starkly paralyzed role as mere commentator on the geopolitical upheaval on its southern flank. With its overly cautious attitude and deliberate avoidance of the most controversial dimensions of the conflict, Europe risks condemning itself to the status of a permanently sidelined player. This was all the more frustrating, the analysis noted, because the crisis actually offered a genuine opportunity for ambitious diplomatic action, with the United States in search of a strategy, Arab Gulf countries desperately in need of regional security, and Iran on the verge of a lasting domestic political crisis.

Council of Europe Secretary General Alain Berset framed the stakes in starker terms: the conflict unfolding in Iran, Israel, and across the Gulf is a test of whether Europe intends to shape the emerging order or merely observe its fragmentation. Inaction, he warned, is not prudence—it is abdication.

From the perspective of MENA capitals, Europe’s behavior confirms a long-standing suspicion that the EU is, in the end, a payer rather than a player. The phrase, which has haunted European foreign policy circles for years, captures something real. Europe provides substantial humanitarian aid, development funding, and reconstruction assistance. It issues statements and sends special envoys. But when the decisive moments arrive—when military force is used, borders are redrawn, and new political facts are established on the ground—Europe is absent from the room. The Center for Global Development noted at the start of 2026 that the EU finds itself exposed, stretched, and increasingly on its own, and that many member states are retreating from international development assistance altogether, redirecting resources toward Ukraine and defense spending.

Arab states have drawn their own conclusions. A Carnegie Endowment study documented how, since late 2023, Arab diplomacy has moved from transactional normalization politics toward an assertive, public Arab posture on Gaza and the Palestinian question—a posture that increasingly bypasses Europe. The March 2025 Arab League summit in Cairo adopted an Egyptian-sponsored reconstruction plan for Gaza that was explicitly presented as an Arab alternative to external proposals. The message was clear: if Europe cannot act, the region will act without it.

Strategic Autonomy: Rhetoric Without Substance

The gap between European rhetoric and actual policy outcomes could not be sharper, and nowhere is this more visible than in the EUs embrace of the language of strategic autonomy.

The language of “strategic autonomy” has been central to EU discourse since at least the 2016 Global Strategy, and it has intensified dramatically in the wake of Trump’s return to power. At the Munich Security Conference in February 2026, Chancellor Merz positioned Europe as capable of defending itself, noting that the post–World War II rules-based order no longer exists in its original form. President Macron underscored European strategic autonomy, warning of economic and geopolitical risks stemming from U.S. policies. Josep Borrell, before leaving his post as High Representative, had urged Europeans to “relearn the language of power”.

Yet, the gap between this rhetoric and actual policy outcomes in the Middle East remains enormous. The MEIG Programme at the University of Geneva captured the paradox: Europe’s pursuit of strategic autonomy is first and foremost a matter of political independence and credibility, and strengthening European decision-making capacity would allow the EU to present coherent crisis responses that are seen as credible and consistent rather than contingent on shifts in another capital’s politics. But that is precisely what has not happened. When the Iran strikes occurred, European capitals did not produce a joint contingency plan, a unified diplomatic initiative, or even a consistent public message. They produced three or four competing national positions and a collective statement that avoided the central question.

This pattern repeats across every major MENA dossier. On Libya, EU member states backed opposing sides of the civil conflict, with France and Italy supporting different factions. On Syria, the EU confined itself to humanitarian provision while Russia and Turkey shaped the military and political outcome. On Gulf security, European states continue to compete for arms contracts and investment deals on a bilateral basis, undermining any collective posture. The European Policy Centre observed at the start of 2026 that the fundamental question facing Europe is whether its internal divisions are becoming lasting features of EU politics; not a bug to be fixed, but a defining structural characteristic.

Toward a Credible European Role

The diagnosis is severe, but it need not be terminal. Europe possesses assets that no other external actor can match in the MENA region: geographic proximity, deep economic ties, institutional relationships built over decades, and—when it chooses to exercise it—a normative authority rooted in international law that remains meaningful to many actors in the region, even those who have grown cynical about its application.

Restoring credibility, however, requires more than platitudes and passionate statements. It requires structural reform, and here one is conscious of repeating prescriptions that have been offered many times before—which is itself part of the problem. The fact that these arguments are familiar does not make them wrong; it makes the failure to act on them more damning.

The most urgent reform is institutional. The EU must accept that unanimity in foreign policy is a formula for irrelevance. The debates around qualified majority voting in the Common Foreign and Security Policy (the EU’s framework for coordinating member states’ foreign and security positions) have been underway for years; the Iran crisis should give them new urgency. A mechanism that allows a coalition of willing member states to act under the EU banner—without being vetoed by states with no material stake in the outcome—would be a transformative step. This does not require treaty change; the existing “constructive abstention” provisions in the Lisbon Treaty (2009) offer a legal basis that has been dramatically underused.

Europe must also decouple its MENA policy from the rhythms of American domestic politics. The Iran experience demonstrated that a European foreign policy premised on waiting for the right American president is not a foreign policy at all. This means building genuine economic instruments—not symbolic ones like INSTEX—that can deliver on commitments to partners independently of Washington’s posture. It means developing autonomous intelligence and diplomatic capabilities in the region rather than relying on American assessments. And it means, critically, applying international law consistently—not selectively invoking it for Ukraine while falling silent on Gaza.

Perhaps hardest of all, the EU must reimagine its relationship with MENA partners as one based on mutual interest rather than conditionality and paternalism. The ECFR’s mapping of European leverage in the MENA region found that many Arab officials and elites believe Europe uses two distinct lenses to determine their regional policies—migration and counter-terrorism. 

A Europe that reduces its southern neighborhood to a source of threats rather than a space of shared strategic interest will continue to lose ground to China, Russia, Turkey, and the Gulf states, all of whom engage the region on its own terms.

The Cost of Incoherence

The Iran crisis of 2025–2026 has laid bare a truth that European policymakers have spent years trying to obscure: the EU is not yet a geopolitical actor in the Middle East. It is a collection of national foreign policies loosely coordinated through institutions that lack the authority, the speed, or the mandate to act decisively in high-intensity crises. The gap between Europe’s self-image as a normative power committed to international law and multilateralism, and its actual behavior-divided, reactive, dependent on Washington, and selectively principled-is now fully visible to every capital in the MENA region.

The cost of this incoherence is not abstract. It is measured in lost diplomatic influence, in partnerships that drift toward other powers, and in regional actors who no longer factor European preferences into their calculations. It is measured in the growing perception, from Cairo to Riyadh to Tehran, that Europe talks about rules but follows power—and that when power shifts, Europe shifts with it, belatedly and uncertainly. There is a particular sting in this for a continent that built its post-Cold War identity on the proposition that it had transcended power politics.

However, Europe is not doomed to irrelevance in the Middle East. Its assets are real, and the demand for a credible, law-based alternative to American unilateralism and Chinese transactionalism is genuine. But meeting that demand requires a willingness to act—not merely to comment—in a way that the EU has so far been unable to summon. The question for European leaders is no longer whether strategic autonomy is desirable but whether they are prepared to pay the political costs of achieving it. On the evidence of the Iran crisis, the answer remains uncertain.

The U.S. Department of War’s confrontation with AI company Anthropic in early 2026 over military use of AI pushed into public view a question that had mostly circulated in AI safety circles, classified policy discussions, and speculative scenario work: what circumstances would drive a government to decide that a frontier AI lab is too important to remain under private control? 

Such a decision may often be described as a matter of “nationalization”, but that term can obscure as much as it clarifies. The more precise question revolves around issues of custody, release authority, access controls, and ultimate decision rights over frontier systems that could matter for cyber operations, biological risk, intelligence, military planning, economic management, and strategic competition. Formal seizure of a company is only the outer edge of a broader continuum. Long before reaching that point, governments can impose a variety of controls, ranging from compute licensing to priority access rules.     

The Anthropic episode shows how quickly the alignment question—the challenge of ensuring AI systems behave in accordance with intended human goals and safety constraints—becomes a question of sovereignty. Anthropic had already integrated Claude into government and classified environments while presenting itself as a company that would support lawful national-security uses subject to two red lines—mass domestic surveillance of Americans and fully autonomous weapons. When the Pentagon reportedly pushed back, the conflict was not really about whether AI should be useful to the state. It was about who gets to define the boundaries between lawful and safe use, and strategically necessary use. 

That is exactly the kind of dispute that makes nationalization plausible. A private lab can claim that its model should remain aligned to the developer’s values; a military customer can argue that lawful national-security use should not be constrained by a vendor’s categorical veto. Once the model becomes strategically indispensable, the state’s answer is likely to harden.

In addition, Anthropic’s early June essay on how AI models are getting closer to being able to improve themselves without human intervention—so-called recursive self-improvement (RSI)—added to the complex mix around this discussion. Early June also saw reports suggesting— not surprisingly—that Anthropic’s most capable model, Mythos, was being used by the U.S. National Security Agency (NSA) to assist in identifying vulnerabilities in Chinese networks, presumably for future offensive cyber operations. 

Mythos and the Threshold Problem

Anthropic’s public handling of Mythos makes the problem more concrete. The company claims that Mythos does better than humans on some tasks related to cybersecurity and generating offensive cyber operations approaches, but such a model could be dangerous in the wrong hands (meaning non-state actors). Anthropic officials have not released the model to the general public, instead only giving it to a select group of tech companies and organizations responsible for critical software. The company has also offered to work with the U.S. government to “help defend against the risk of these models”.  The NSA report suggests this process is well underway—the NSA has both an offensive and defensive mission to protect U.S. government networks.

Once a leading frontier lab says that a general-purpose model can materially improve vulnerability discovery at scale (and therefore should be withheld from general release and provided only to selected partners responsible for critical software infrastructure), it has already conceded the central premise behind state control—some model capabilities are too consequential to be treated as ordinary product launches. 

Mythos does not prove that complete nationalization is imminent. It does, however, create a precedent for a release regime in which access, custody, monitoring, safeguards, and coordination with government become central design features rather than afterthoughts. The same logic applies to OpenAI’s Preparedness Framework, where high-capability cyber, bio/chem, and AI self-improvement thresholds trigger stronger controls. Once frontier models are classified internally as high-risk capabilities whose deployment depends on mitigation, monitoring, trusted access, and enforcement, the distance between corporate governance and state governance narrows sharply.

This is where my critique of Anthropic’s broader AI-leadership argument comes in. Anthropic is right that frontier systems may create catastrophic misuse risks and that democratic governments need a serious strategy for securing model weights, compute, and dangerous capabilities. But its public framing too often collapses two different claims into one: that advanced AI requires strong safety governance, and that the United States and its leading labs should a preserve decisive advantage over China. 

That fusion is analytically unstable, in my view. As the claim that frontier AI could enable catastrophic cyber, biological, or military effects becomes stronger, so too does the case for U.S. controls on China, and, as a result, for China to conclude that U.S. labs are effectively part of a national-security project. In that world, safety rhetoric can become indistinguishable from the U.S. denying Chinese access to key components as a matter of strategy. The result is not necessarily more global safety; it may be more mutual insecurity, more hedging, and more pressure on both governments to pull frontier labs closer to the state.

That is why the recent statement from OpenAI’s vice president of global affairs, Chris Lehane, is important. Lehane suggested that the United States could use its AI lead to build a global governance mechanism for safer and more resilient systems, potentially including China. He also invoked a model for international coordination similar to the International Atomic Energy Agency, which aims to avoid nuclear proliferation between rival states by offering independent nuclear supervision. This is not a minor rhetorical shift. It implicitly recognizes that if the United States treats frontier AI only as a competitive asset to be denied to China, then Beijing will read every U.S. lab-government tie as evidence of containment and every safety standard as a potential instrument of exclusion. 

A U.S.-led framework that includes China would not solve the nationalization problem, but it would create an alternative channel for discussing release thresholds, cyber and bio red lines, model evaluation, and crisis communication before national-security establishments on both sides conclude that unilateral state control is the only safe path. The idea of a U.S.-China dialogue on frontier AI model governance was on the table at the mid-May presidential summit in Beijing, primarily because of Mythos. But there will be major political obstacles to real dialogue work, and a multi-lateral approach will surely be required.

How Close is the United States?

While it has not yet pursued total nationalization, the United States is already moving along the soft-nationalization path. The 2023 Biden AI executive order used Defense Production Act (DPA) authority (established in 1950) to require developers of powerful foundation models to share information,  including safety-test results and information about large compute clusters, with the government. The Bureau of Industry and Security then moved toward implementing reporting rules that would give the state greater visibility into advanced model development and compute infrastructure. That did not amount to seizure, but it normalized a crucial principle: frontier models and large compute clusters are not merely private assets; they are national-security-relevant capabilities subject to exceptional state visibility.

The Trump administration has pushed the issue from oversight toward operational control. The Anthropic-Pentagon conflict, OpenAI’s expanding government work, and broader efforts to ensure the Department of Defense and the intelligence community have access to frontier models all point in the same direction. The U.S. government wants best-in-class models available inside secure environments, under conditions it can shape. 

Strategic Measures?

If a leading lab refuses certain uses, if contractual arrangements with cloud providers block access, or if employees revolt against defense work, policymakers will not necessarily wait for the market to resolve the problem. They will look for statutory tools, procurement leverage, export-control authorities, security classifications, and possibly DPA-style priority measures. Discussion in a recent draft bill by Senator Marsha Blackburn makes reference to “potential nationalization or other strategic measures” around artificial superintelligence is therefore best read not as an immediate policy plan but as an early marker of contingency planning.

The most plausible U.S. trajectory is not a sudden takeover of OpenAI, Anthropic, Google DeepMind, or xAI. The most likely path is a staged escalation. The first stage is visibility: mandatory reporting, model evaluations, compute-cluster disclosure, incident reporting, and security requirements. This is already happening to some degree via cooperation with the US Center for AI Standards and Innovation (CAISI).  (Note: A Commerce Department page touting the additions of xAI, Google, and Microsoft joining OpenAI and Anthropic on voluntary evaluation was pulled down shortly after being released, highlighting the sensitivity of the issue and major ongoing debates about how to handle the situation caused by the Mythos Moment, without any clear legal framework in place.) 

In late May, the government pulled back a new Executive Order (EO), which was intended to begin the designing of a legal framework for the government’s role in the release of frontier models. The subsequent release of a slightly modified version of the EO highlights the internal debate within the administration on the relationship between the government and leading labs.

The post-EO debate is best framed as state access without formal state control. The order rejects a licensing or preclearance regime for frontier models, but creates a 30-day voluntary pathway for covered frontier labs to give the federal government pre-release access under classified benchmarking and confidentiality protections. That puts the U.S. government closer to frontier labs as an evaluator, early user, cybersecurity coordinator, and national-security partner—but not as owner or operator. 

Another controversy has recently arisen: the temporary government-directed restriction on access to Anthropic’s Fable 5, which is a public-access version of the Mythos 5 model. Anthropic’s statement indicated that the U.S. government “believes it has become aware of a method of bypassing, or ‘jailbreaking’ Fable 5”, although the government did not provide evidence or specifics. It is also possible that there was classified information suggesting Chinese actors gained some level of access to Mythos capabilities, but this seems unlikely to have been a primary driver. Public reporting suggests that Amazon Web Services (AWS) alerted U.S. officials to a potential jailbreak or misuse pathway involving the model, while Anthropic has maintained that the issue was limited and did not justify broad restrictions on deployment. Although the full details remain classified or disputed, the episode strongly suggests involvement by multiple agencies, likely including elements of the intelligence community such as the National Security Agency (NSA), alongside Commerce and national security officials. 

More important than the technical merits of the reported vulnerability is the institutional question it exposed: who, exactly, has the authority to determine whether a frontier model should be released, delayed, restricted, or modified? The answer remains unclear. 

In practice, a combination of cloud providers, frontier labs, intelligence agencies, and White House officials appears to have improvised a decision process in real time—that ambiguity is unlikely to survive future incidents. Rather than reducing government involvement, the Fable 5 controversy will likely strengthen arguments for a more formal review process, clearer authorities, mandatory reporting requirements, and expanded government oversight of frontier model development.

Another lesson from the Fable 5 episode is that cloud providers may emerge as quasi-regulators of frontier AI. Public reporting indicates that AWS played a key role in elevating concerns about Fable 5 to senior administration officials. If frontier AI increasingly depends on a handful of hyperscale cloud providers for training, deployment, and security monitoring, then effective control over model release may ultimately involve a triangular relationship among labs, cloud providers, and governments rather than a simple state-versus-company dynamic.

The unresolved tension is whether this “voluntary partnership” model is durable. The latest reporting suggests the system may already be evolving beyond voluntary cooperation. Multiple AI executives reportedly now believe that frontier labs are expected to provide government officials with early access to advanced models and maintain continuous consultation around major launches. Whether formally required or not, this begins to resemble an informal pre-release review process. Anthropic-style safety advocates will see it as too weak without mandatory testing, while anti-regulation voices will still worry it normalizes government gatekeeping. In light of Trump’s separate interest in potential public equity stakes in leading labs—articulated in early June—the broader direction is toward treating frontier labs less like ordinary private firms and more like strategic national infrastructure, but without yet crossing into nationalization.

The second step in this staged escalation is conditional permission: access to frontier training runs, gating of certain deployments, trusted-user regimes, identity-linked monitoring, restrictions on model weight release, and government say over high-risk cyber or bio capabilities. 

The third stage is operational integration: classified development streams, defense and intelligence procurement dependence, government-directed capacity allocation, priority access to AI hardware and power, and secure facilities for selected models. Only after those stages fail to meet the government’s expectations, or after a crisis, does hard nationalization become a serious option. 

First Real Test

The June executive order appears to bring us further along this staged road. The Fable 5 dispute may ultimately be remembered as the first real test of this emerging system. Unlike earlier debates over model evaluations or voluntary reporting, this case appears to have involved an attempt to influence or delay deployment of a frontier model already judged by its developer to be ready for release. Whether the government’s concerns were justified is almost secondary. What matters is that the episode exposed the absence of a settled mechanism for adjudicating disagreements between frontier labs, cloud providers, intelligence agencies, and policymakers. Once that gap becomes visible, pressure typically builds for new authorities rather than fewer authorities.

Four triggers could move Washington closer to that third stage or beyond. The first is a model that crosses a widely recognized threshold in cyber, bio, autonomous research and development, or strategic planning. This could include a model capable of discovering previously unknown software vulnerabilities, substantially lowering barriers to biological engineering, or autonomously pursuing long-horizon research objectives—especially if the lab itself admits that general release is unsafe. With Mythos, we have seen an early version of this trigger. More importantly, the subsequent Fable 5 dispute suggests that once a model is viewed as crossing a government-defined capability threshold, the debate rapidly shifts from technical evaluation to questions of release authority, trusted access, and sovereign oversight.

The second is loss of visibility: a major training run, capability jump, or deployment that government regulators learn about too late or cannot evaluate independently. 

The third is military dependence: if frontier models become central to cyber operations, targeting support, autonomous systems, logistics, or strategic warning, the state will demand assured access and override rights. 

The fourth is geopolitical shock: a Chinese breakthrough, a major offshore compute loophole, or evidence that a rival has paired frontier models with military or intelligence systems in a way that appears to threaten U.S. advantage.

There is also a political-economy reason the U.S. pathway is likely to remain indirect for as long as possible. The leading labs are not just model developers; they are embedded in cloud contracts, GPU/CPU procurement, energy deals, enterprise distribution, research labor markets, and consumer platforms. A direct takeover would raise compensation, governance, liability, IP, antitrust, and constitutional questions that would be difficult to resolve quickly. 

But those obstacles do not prevent the state from creating a special frontier-lab regime that looks increasingly like the defense-industrial base: private ownership, public dependence, classified interfaces, security clearances, mandatory reporting, and government priority in crisis. That model fits the American system better than outright ownership, and for that reason, it is the more likely outcome, unless a truly discontinuous capability shock changes the political calculus. Here, we will need to watch closely how President Trump’s apparent proposal for government equity ownership in leading AI labs plays out. The administration has already taken a stake in U.S. national champion semiconductor manufacturing leader Intel, setting an interesting precedent.

On balance, the United States is not close to formal nationalization today but rather something more important—a durable governance regime in which the leading labs remain privately owned but increasingly operate like regulated strategic infrastructure. The late-2020s window matters because several pressures are converging at once. AI safety thresholds are becoming operational rather than hypothetical; the defense and intelligence communities want frontier access; the labs need government support for chips, power, permitting, procurement, and international market access; and U.S.-China competition gives every capability advance a national-security interpretation. Hard nationalization remains a crisis option. Soft nationalization is already underway. The Fable 5 controversy demonstrates that the key battleground is no longer ownership but authority. Now, the central question has become who decides when a frontier model is safe enough for broad release: the company that built it, the cloud provider that hosts it, or the government that believes it bears ultimate responsibility for national security consequences.

The Mythos/Fable controversy suggests that soft nationalization may advance less through legislation and more through ad hoc crisis response. Each dispute over cyber capabilities, biosecurity risks, model autonomy via RSI, or strategic competition creates incentives for government agencies to seek greater visibility and greater leverage over release decisions. Yet every expansion of that leverage carries a tradeoff. It increases the attractiveness of open-source ecosystems—particularly Chinese ones—that are perceived as less vulnerable to discretionary intervention by Washington. The challenge for U.S. policymakers is therefore not merely to create stronger oversight, but to do so in a way that preserves confidence in the openness, predictability, and global accessibility of the American AI ecosystem.

The China Mirror Image: Steering Before Seizure

The common assumption in Washington that Beijing could simply nationalize its leading AI labs overnight is both partly true and mostly misleading. China has far more coercive leverage over its private sector than the United States. It can use party-state channels, cybersecurity reviews, data rules, model filing and registration requirements, procurement, state-owned enterprise (SOE) partnerships, compute allocation, administrative guidance, and national planning mechanisms to shape corporate behavior. But precisely because Beijing already has this dense toolkit, it has less need to jump directly to formal seizure. In China, the better concept is not nationalization, but state steering.

Several official concepts define the likely Chinese path. “Two unwavering principles”, for example, refers to the Party-state priorities of supporting both the public economy and the private economy, with the 2025 Private Economy Promotion Law reaffirming that private firms remain an important component of China’s socialist market economy. “Coordinating development and security” captures the planning logic: innovation and control are not separate domains but must be fused. “AI Plus” points toward broad deployment of AI across industry, services, governance, science, and embodied systems rather than confinement inside a single state weapons complex. “Self-reliant and controllable” does not simply mean state ownership; it means reducing foreign dependency while ensuring that decisive systems remain governable, interoperable, and nationally legible. “Safe, reliable, controllable,” especially in military AI, places final authority with the state, but does not require that every leading lab become an SOE.

This distinction matters because China’s frontier AI ecosystem is not an old-style strategic weapons complex but an industrial policy-led ecosystem designed to leverage AI for economic growth. It depends on private and quasi-private firms, young technical talent, globally benchmarked research communities, entrepreneurial incentives, cloud platforms, open-source ecosystems, and intense competition across Beijing, Shanghai, Shenzhen, Hangzhou, and returnee networks. A blunt takeover of a leading lab could damage the very incentive structure Beijing needs to sustain. Chinese policy documents themselves reveal this anxiety. They emphasize talent attraction, compensation reform, mobility between firms and research institutes, compute access, and support for private firms. Those are not decorative policy slogans. They are signals that Beijing understands that frontier AI cannot be managed only through command mobilization.

The Chinese system, therefore, faces a paradox of control. It can compel cooperation more easily than Washington, but compulsion is not the same as frontier performance. The most important Chinese labs need access to elite engineers, open research networks, flexible product cycles, commercial customers, and enough autonomy to experiment with model architectures, agentic deployments, and overseas-facing developer ecosystems. A nationalized lab that loses its best researchers, slows iteration, or becomes primarily responsive to bureaucratic reporting lines could fall behind even if it enjoys privileged access to state compute. Beijing’s problem is not whether it has authority but rather how to exercise authority without killing the very private-sector energy that made the leading model developers useful in the first place.

China’s current approach is therefore more likely to build a strategic exoskeleton around the AI ecosystem than to absorb it wholesale. SASAC’s push for central SOEs to expand compute investment, support AI Plus industrial communities, strengthen open-source collaboration, and coordinate embodied-intelligence ecosystems shows the pattern. The state can build large compute platforms, direct procurement, create consortia, set standards, require evaluations, and pull firms into national projects without eliminating their formal autonomy. The Fifteenth Five-Year Plan’s language on government procurement of compute services, compute leasing, model evaluation, national monitoring and dispatch, and full-lifecycle AI risk management points in the same direction. Control emerges through infrastructure, procurement, interoperability, and standards as much as through ownership.

The Chinese military dimension is also more complex than the civil-military-fusion shorthand suggests. Chinese official language on military AI is unmistakably state-centered and emphasizes human-centered, safe, reliable, and controllable systems. Chinese scholarship on military AI also recognizes a risk ladder: near-term risks from autonomous weapons and lower thresholds for conflict, medium-term risks to strategic stability, and longer-term risks from superintelligence. But the institutional solution is not the moral veto of a private lab. It is stronger state governance, international rule-making, and control over military applications. In practice, Beijing would likely expect private labs to cooperate with state-defined priorities while preserving enough commercial incentive and technical autonomy to keep innovation moving. Unlike U.S. companies like Anthropic and OpenAI, there is no evidence that Chinese AI labs have been deeply involved in the Chinese military-industrial complex. This is notable, given that the Pentagon and the intelligence community are using models from U.S. AI labs, and Anthropic has embedded software engineers within the NSA to assist with cyber operations against China. 

When Would Beijing Nationalize?

Beijing would consider harder measures under several conditions. The first would be a single lab or model becoming strategically indispensable while resisting state guidance, especially on military, security, or social-governance applications. The second would be a major safety or political incident, such as a model enabling serious cyber misuse, biological assistance, large-scale social instability, or politically sensitive information flows beyond regulatory control. The third would be wartime or acute crisis conditions around Taiwan, U.S.-China military confrontation, or sanctions that threaten access to compute and model capability. The fourth, and perhaps most important, would be evidence that the United States or allied labs had crossed a dangerous capability threshold while China remained dependent on private firms whose incentives did not align with the state. The fifth would be loss of control over the compute layer; for example, if leading labs used offshore clusters, foreign cloud access, or foreign capital structures in ways Beijing viewed as strategically unacceptable.

Even then, the first move would probably not be formal expropriation. It would be tighter licensing, deeper party-state embedding, mandatory government access, controlled compute allocation, SOE or national-lab partnerships, restrictions on overseas model access, and direct administrative instructions. Beijing has many ways to make a private lab function like a national asset without changing the nameplate on the door. Formal nationalization would be reserved for a case in which those instruments failed, or a particular firm became both central and unmanageable.

This means China may be farther from formal nationalization than many U.S. analysts assume, but closer to functional state steering than the United States. On the other hand, recent U.S. actions, including the EO, suggest that things are changing more quickly than many previously thought possible or desirable in terms of state intervention. 

The Chinese state begins from a stronger supervisory baseline, while the United States is building one under pressure. China’s risk is not chaotic late intervention but gradual over-steering—the possibility that the state exoskeleton becomes so heavy that it undermines talent, entrepreneurial initiative, and frontier experimentation. The U.S. risk is the opposite and revolves around private labs retaining too much autonomy until a crisis forces rushed, legally improvised, and politically contested intervention. The EO process is designed in part to begin laying the groundwork for future government intervention in a crisis scenario.

The Strategic Stability Problem

The biggest danger is that each side reads the other’s soft-nationalization measures as evidence of hard militarization. Chinese analysts already interpret the Anthropic-Pentagon clash and the embedding of Anthropic engineers at NSA as proof that when frontier AI becomes a strategic core capability, Washington will not permit private values or safety commitments to override sovereign national-security claims. U.S. analysts, in turn, often interpret Chinese state steering as evidence that Beijing’s private AI labs are already nationalized in all but name. While both readings may be truthful assessments, they are nonetheless incomplete and miss the fact that each system is struggling with the same structural problems under different institutional conditions. Frontier AI is simultaneously a commercial platform, a scientific tool, a cyber and bio risk, a military enabler, and a symbol of national power.

Beijing is unlikely to view the Fable 5 episode as a primary safety dispute. Instead, the issue will likely reinforce an existing Chinese narrative that leading U.S. frontier labs are increasingly embedded within a national-security ecosystem involving cloud providers, intelligence agencies, defense customers, and executive-branch decision makers. Ironically, this perception may accelerate adoption of Chinese open-source alternatives among governments, enterprises, and developers outside the United States. If access to the most capable U.S. models can be modified, delayed, or conditioned through opaque national-security processes, then open-weight Chinese models begin to acquire an additional value proposition against the predictability of access and freedom from U.S. government intervention. The result could be a diffusion dynamic that runs counter to the strategic objectives of those advocating tighter control over frontier models.

That is why the Lehane proposal from OpenAI matters more than a typical corporate policy intervention. A U.S.-led global governance mechanism that includes China would not be a concession that the two systems are equivalent. It would rather be an admission, as I have previously argued, that certain AI risks cannot be managed only through export controls, procurement, or unilateral lab governance. The agenda should be narrow and concrete to include dangerous-capability evaluation, pre-release notification norms for high-risk cyber and bio systems, model weight security, incident reporting, crisis communication, and red lines around mass surveillance, autonomous weapons, and biological enablement. The United States can still compete fiercely, protect its lead, and restrict specific transfers. But if China is excluded from every serious governance forum, Beijing will have stronger incentives to assume that U.S. safety governance is simply containment by another name.

On the U.S. side, one reason the nationalization debate has become so unstable is that leading AI figures have increasingly reached for nuclear or civilizational-risk analogies to describe artificial general intelligence (AGI) or artificial superintelligence (ASI), even when the analogy does more political work than add analytical heft. If Beijing’s operating assumption is that the United States government and the frontier AI sector are already closely intertwined, then these analogies are not heard as private-sector metaphors but can be read as signals of U.S. state intent.

The Chinese perception that frontier AI is becoming an American strategic weapons project is reinforced when seen through recent moves such as a former NSA director joining the OpenAI board, the Biden administration invoking the Defense Production Act in the 2023 AI executive order, the movement of frontier models into classified and national-security environments, and public claims by leading lab CEOs that advanced AI belongs in the same risk category as nuclear weapons.

That is why Nvidia CEO and president Jensen Huang’s recent rejection of the nuclear analogy is important. Huang’s point was blunt—Nvidia makes GPUs used for video games, logistics, medical imaging, and countless civilian applications. He advocates GPUs to his family and customers, but “doesn’t advocate atomic bombs to anybody”. Starting from the premise that GPUs are like atomic bombs, he has argued, makes it impossible to “finish the thought”. In other words, the analogy is not just technically imprecise but can distort the entire policy frame by pushing what DeepMind’s Demis Hassabis calls the quintessential general-purpose technology, advancing compute into a weapons-control logic that accelerates securitization, export-control maximalism, and arms-race dynamics.

The problem is that the frontier-lab safety discourse often cuts in the opposite direction. Figures such as Geoffrey Hinton (the ‘Godfather of AI’), Sam Altman (OpenAI CEO), and Hassabis (CEO of Google DeepMind Technologies) have invoked catastrophic-risk language to emphasize the need for governance, but Anthropic CEO Dario Amodei’s framing goes further by fusing AI risk with geopolitical competition. 

In Machines of Loving Grace, Amodei argues that advanced AI should be developed and controlled so that democratic states maintain the upper hand over authoritarian rivals. And in “The Adolescence of Technology”, his bio-risk arguments suggest that frontier models could compress tacit expertise, lower barriers to pathogen design, and interface with increasingly automated wet-lab infrastructure. That strengthens the case for guardrails, but also supplies governments with a rationale for treating frontier AI as a controlled dual-use capability rather than an ordinary and quintessentially commercial technology. 

This is the core tension: the more U.S. lab leaders describe advanced AI as civilization-scale, weapons-adjacent, or strategically decisive, the more they make the case for exceptional state authority over release decisions, model access, compute, and eventually lab governance itself. Huang’s objection is therefore not just a corporate defense of Nvidia exports but a warning that the wrong analogy can become self-fulfilling, pushing Washington and Beijing toward exactly the national-security framing that makes some form of functional nationalization more likely.

Close to Steering, Not Yet Seizure

In the meantime, both countries remain closer to functional nationalization than to formal seizure. In the United States, the frontier labs remain privately owned, innovative, and politically powerful, but they are being pulled into a national-security architecture through reporting rules, government procurement, classified deployment, safety thresholds, and compute politics. In China, the leading labs remain commercially important and technically dynamic, but they operate inside a denser supervisory state that can steer compute, data, standards, procurement, and institutional partnerships. Driven by the risks around Mythos, Washington is moving from market-led innovation toward strategic oversight as expressed in the June EO. Beijing is moving from strategic oversight toward more selective and sophisticated ecosystem steering.

The conditions for hard nationalization are therefore still exceptional. These include a recognized ASI or near-ASI threshold, a catastrophic cyber or bio incident, a major military crisis, loss of state visibility, or a geopolitical shock that convinces leaders that private decision-making has become intolerably risky. We are not there yet on either side. But we are much closer than we were two years ago to a world in which frontier AI labs are treated as quasi-national assets. The real policy challenge is to build enough oversight, transparency, and international crisis-management capacity that neither Washington nor Beijing concludes that outright seizure is the only remaining path to safety and strategic control.

The upcoming U.S.-China AI dialogue will likely clarify the limits of cooperation more than produce real governance breakthroughs. The new Trump EO frames frontier AI primarily through cybersecurity, critical infrastructure protection, and the tiresome insistence on “global AI dominance,” while creating a voluntary 30-day early-access/testing channel between U.S. frontier labs and the federal government. That makes any proposal to share something like a defensive Mythos capability with China politically radioactive. Even a carefully conditioned defensive carveout will be read through the lens of cyber espionage, military-civil fusion, and the “decisive strategic advantage” school associated with former Biden officials, RAND-linked thinking, and export-control maximalists. 

The dialogue still matters, but probably less as an arms-control venue than as a crisis-management mechanism. Can the two governments define red lines around AI-enabled cyber operations, biosecurity, autonomous military escalation, model theft, and third-party/non-state actor use? U.S. Treasury Secretary Scott Bessent’s reported leadership suggests the talks will be framed as engagement from a position of U.S. advantage, not concession. Meanwhile, rumored participation by Politburo Standing Committee member and Xi Jinping’s most trusted lieutenant and security czar, Cai Qi, if confirmed, would signal Xi-level political authority on the Chinese side rather than a narrow technical exchange. But that only helps if both sides bring real cyber, AI, intelligence, and lab-level expertise into the room. 

Otherwise, the talks risk becoming another high-level channel where each side repeats first principles: Washington says governance cannot become technology transfer; Beijing says safety cannot become containment. The best realistic outcome is therefore not “collaboration” in the old cooperative sense, but guardrailed competition such as narrow understandings on catastrophic-risk areas, incident communication, and non-state actor threats, while the core race for frontier capability continues largely untouched, with all the risks that implies.

Finally, the Anthropic blog post on RSI is a critical signpost for all of these issues, as it suggests that leading AI researchers are increasingly concerned that we are much closer to a “singularity”—the point where models are capable of improving themselves without human intervention—than previously believed. The implications of this are profound. It appears that leading U.S. AI labs are concerned that there is no framework for dealing with this eventuality, with the corollary that consideration of a pause in AI development should now be on the table. 

But China would have to be party to any such consideration, and the current climate in Washington, and the insistence in some quarters on “U.S. dominance” in the sector, completely misses this critical point. Time is of the essence, as we may be less than a year away from an RSI moment, but it will not be a binary moment like the Trinity detonation in the New Mexico desert, which launched the nuclear age. There is no clear definition of RSI takeoff, but keeping the process of evaluating models classified within the U.S. government, for example, does not seem wise here. Without an agreement with China that lays the groundwork for future clear guardrails around model development as we near an RSI moment, the risks around nationalization and misunderstanding on both sides will increase. We need serious progress on both sides, including new organizations, authorities, and modes of public-private partnership to corral this genie before it is too late.

The ongoing confrontation involving Iran, Israel, and the United States has demonstrated a familiar strategic reality in alliance politics: allies may share enemies without sharing the same outlook. The two remain closely connected through intelligence cooperation, military assistance, missile defense systems, and a broad commitment to limiting Iranian regional influence. Yet, beneath that durable partnership lies an important divergence in how each side interprets the Iranian challenge. 

Israel conceptualizes Iran as an immediate, geographically proximate, and multi-dimensional security challenge, manifested in missile deployments, proxy networks, cyber capabilities, and ideological hostility. Within this framework, any delay in tackling Iran is perceived as inherently risky, allowing adversarial capacities to deepen and become more difficult to reverse.

By contrast, the United States situates Iran within a broader and more complex global strategic environment. For Washington, Iran is a significant but not singular concern, competing for attention alongside great-power rivalry, alliance management, economic stability, and domestic political constraints. This wider lens encourages a more measured approach, in which policy responses are evaluated not only for their effectiveness against Iran but also for their potential costs across other theaters. 

Consequently, where Israel emphasizes urgency and pre-emption, the United States often privileges containment, deterrence, and calibrated engagement. It is important to understand the complexity of these differing approaches because they may complicate the duration of the present conflict. A permanent end to the war may remain difficult to achieve so long as the two allies continue to define the Iranian problem through different strategic lenses.

Operational Priorities and Regional Risk Calculations

These differing threat perceptions translate into distinct operational preferences and regional strategies. Israel tends to view Iranian advances, particularly through proxy actors such as Hezbollah, as cumulative dangers that must be interrupted before they become unmanageable. Its strategic doctrine favors pre-emptive action and the sustained degradation of hostile capabilities, especially in theaters adjacent to its borders. For Israel, confronting Iran is inseparable from neutralizing its regional network, with particular emphasis on proximate threats that can directly affect national security.

The United States, however, approaches these same dynamics through a broader regional and systemic perspective. Escalation involving Iran and its proxies is assessed in terms of potential spillover effects, including state fragility, humanitarian crises, and disruptions to global trade and energy flows. For instance, tensions in critical maritime corridors such as the Strait of Hormuz are viewed not merely as localized flashpoints but as risks to the global economic system. This orientation often leads Washington to balance support for Israeli security objectives with efforts to limit escalation and preserve regional stability. Thus, while Israel prioritizes the neutralization of immediate threats, the United States emphasizes crisis management and the prevention of wider systemic disruption.

This divergence is especially visible in relation to Iran’s regional network. For Israel, Iranian influence is measured through rockets, tunnels, drones, intelligence cells, and armed actors positioned close to Israeli territory. The most immediate example remains Hezbollah in Lebanon. Israeli security doctrine has long viewed Hezbollah’s arsenal as one of the gravest conventional threats facing the state. Any confrontation with Iran is therefore inseparable from Israel’s northern front. Degrading Hezbollah’s capabilities is often seen as central to weakening Tehran’s deterrent architecture.

In contrast, the United States considers Lebanon through the lens of broader regional dynamics. A large-scale Israel-Hezbollah war risks state collapse in Lebanon, humanitarian fallout, refugee movements, disruption in the eastern Mediterranean, and wider escalation involving multiple actors. Washington’s instinct has therefore often been to support Israel’s security needs while simultaneously pressing for restraint and crisis management. Israel’s strategic logic emphasizes neutralizing proximate danger, whereas America’s logic emphasizes preventing wider spillover. The recent back-and-forth on whether Lebanon was part of the temporary ceasefire is a case in point, with Israel insisting that Lebanon should be kept out of the ceasefire agreement.

The same pattern is evident in the Strait of Hormuz. For the United States, Hormuz is not merely a regional flashpoint. It is a central artery of global trade and energy flows. Any sustained disruption affects oil prices, inflation, insurance markets, maritime confidence, and allied economies from Europe to Asia. It also tests U.S. naval credibility as a guarantor of maritime access. For Washington, therefore, the management of Hormuz is tied directly to the wider global order.

Israel also monitors Hormuz closely, but from a narrower strategic point of view. It is concerned less with global shipping governance and more with how Iran might use Hormuz leverage to extract concessions, distract attention, or strengthen its bargaining position elsewhere. Israel’s principal concern remains whether Iranian coercive capacity is rising or falling. The American concern is whether the broader economic system can absorb another shock. Thus, Washington can prioritize de-escalation to preserve shipping stability, while Israel may support sharper coercive pressure if it weakens Iran’s regional posture. 

Structural Constraints and the Persistence of Strategic Divergence

The divergence between American and Israeli approaches is further shaped by structural factors, including geography, global commitments, and domestic political environments. Israel’s tolerance threshold is lower because its strategic depth is limited and its sense of vulnerability is acute. In Israeli thinking, even a near-nuclear Iran can transform regional psychology, embolden proxies, constrain Israeli operational freedom, and erode deterrence. The United States has historically been more willing to test diplomatic timelines, inspection mechanisms, sanctions bargains, and phased rollback arrangements. American power and geography provide greater room to manage ambiguity while Israel regards any ambiguity concerning Iran as dangerous. Washington globalizes the Iran war, while Israel regionalizes it. Moreover, Washington must continuously integrate Middle Eastern policy within a wider matrix that includes relations with other major powers such as China and Russia, as well as complex partnerships with states like Pakistan. 

Israeli perceptions of Pakistan have often been shaped by security concerns such as its nuclear status, domestic anti-Israel political currents, military links across the Muslim world, and the possibility of strategic alignment with anti-Israel actors. Meanwhile, the United States sees Pakistan through a more mixed framework. It can be frustrating or unreliable, yet still useful as a diplomatic intermediary, intelligence partner, logistical channel, or crisis messenger in moments when direct communication is constrained. Washington is more likely to consider Pakistan as a variable to be managed, whereas Israel is more likely to view it through a risk-based lens.

China presents a still larger divergence. For Washington, every Middle Eastern crisis now intersects with long-term competition with Beijing. A prolonged conflict that drains U.S. resources while China continues importing Gulf energy, expands economic influence, and avoids military burdens can appear strategically disadvantageous. American planners, therefore, ask whether another Middle East crisis distracts from the Indo-Pacific balance. Israel, by contrast, tends to treat China more selectively. Beijing matters in technology, infrastructure screening, diplomatic positioning, and its relationship with Tehran, but China is rarely perceived in Israel as more urgent than Iran’s immediate threat network.

Russia is also viewed through different criteria. The United States increasingly interprets Moscow’s ties with Tehran as part of a broader anti-Western alignment. Military cooperation, sanctions evasion, diplomatic shielding, and transactional coordination all reinforce that perspective. Israel’s approach has historically been more calibrated because of Russia’s presence in Syria, deconfliction requirements, diaspora linkages, and the practical need to manage military realities in Israel’s near theater. This does not imply trust, but it does create a different style of statecraft. 

Domestic politics reinforce these contrasting outlooks. Israeli governments operate under intense public expectations regarding immediate security. Rocket fire, border incidents, hostage crises, coalition fragility, and the memory of strategic surprise shorten political patience. American administrations operate under another political logic shaped by electoral cycles, congressional scrutiny, budget pressures, public aversion to new wars, and alliance consultation. Even when U.S. leaders support Israel strongly, they often seek to limit mission creep and prevent broader regional entrapment.

Enduring Partnership Amid Systemic Instability 

These differences do not undermine the alliance but rather define its operational reality. The U.S.-Israel relationship remains one of the strongest strategic partnerships in contemporary international politics. Intelligence integration, technological cooperation, missile defense coordination, and diplomatic alignment across administrations provide it with unusual depth. Yet strong alliances are not defined by the absence of disagreement. They are defined by the capacity to manage disagreement without strategic rupture. The U.S.–Israel partnership remains deeply institutionalized and resilient, yet it accommodates persistent disagreement over priorities, timing, and acceptable risk.

The challenge today is that the external environment has become more complex. The United States no longer operates in a unipolar moment where Middle Eastern crises could be handled without significant opportunity costs. China’s rise, Russia’s confrontation with the West, fiscal pressures, divided domestic politics, and contested global supply chains all reduce Washington’s appetite for unlimited regional commitments. Israel, however, cannot outsource geography. It still lives in a neighborhood where proximate threats can escalate rapidly and where deterrence failures carry immediate consequences.

As a result, both countries often speak the language of unity while practicing different strategic calculations. Israel seeks a weaker Iran and a degraded proxy network. The United States seeks a constrained Iran without a region-wide war that benefits rivals or destabilizes the global economy. These objectives overlap, but they are not identical. This divergence is likely to persist. Future crises involving Iran, Lebanon, maritime security, or missile escalation will again reveal the same pattern. Washington will combine sanctions, deterrence, naval presence, and diplomacy. Israel will continue pressing for sharper red lines, faster responses, and longer-term rollback of Iranian capabilities. Neither approach is inherently contradictory but reflects a distinct national condition. 

In brief, the United States adopts a globalized perspective on the Iranian challenge, seeking to constrain Tehran without triggering broader systemic instability, while Israel maintains a regionalized focus centered on immediate threat mitigation. This duality ensures continued cooperation, but also guarantees that future crises will reproduce familiar tensions, revealing an alliance characterized not by uniformity of strategy, but by the capacity to manage enduring divergence. They stand together politically and militarily yet are often seen pursuing two different strategic versions of the same war.

Abigail Flynn: Hello and welcome to CR Amplified, the Cairo Review’s podcast where we talk to experts and policymakers about relevant issues on the world stage. I’m Abigail Flynn. 

Today we’ll be speaking about the ramifications of the U.S.-Israel war on Iran, particularly with regard to the members of the Axis of Resistance and the positions of the Gulf States whose security relationship with the United States has been brought under question, as these countries have been targeted during the current conflict by Iran. 

I am joined by Dr. Hamidreza Azizi, visiting fellow at the German Institute for International and Security Affairs in Berlin and associate researcher at Clingendael, the Netherlands Institute of International Relations. 

Dr. Azizi holds a PhD in regional studies from the University of Tehran and his research focuses on security and geopolitical issues in the Middle East and Central Eurasia, Iran’s foreign and security policy, and Iran-Russia relations. Dr. Azizi has also recently published a book, The Axis of Resistance: Iran, Israel and the Struggle for the Middle East. He is joining us today to give his perspective on the current state of regional affairs. 

Dr. Azizi, thank you very much for joining us today. I wanted to get your opinion for our upcoming issue, which discusses the issue of power plays, particularly how smaller powers are handling the fact that these very large powers are coming head-to-head in many different ways, and most specifically recently with the U.S.-Israeli war on Iran. So I wanted to get your perspective starting with the Axis of Resistance. What players are currently still on the board? Where do they stand? And what’s their position with regards to Iran at this point?

Dr. Hamidreza Azizi: Thank you very much for having me. It’s a pleasure to join you for this conversation. Of course, the recent war, or in some way we can say the ongoing war, between the U.S., Israel on one side and Iran on the other, has been a kind of test for the Axis of Resistance. 

What had emerged as a very solid bloc gathered around the Islamic Republic in Iran since October 7, 2023, went through a lot of ups and downs. There was a moment that there seemed to be a sense of triumphalism, not just among the Iranian leaders but among other figures of the Axis like Hassan Nasrallah and others. But that was short-lived. 

Then came the blows to Hezbollah itself, the fall of Assad, and everything that eventually culminated in two wars: the 12-day war and the recent one. So one may ask, credibly, where the Axis of Resistance stands in this whole thing.

Let me start with a little bit of background from the 12-day war, where the Axis of Resistance was essentially absent. At the time, this was interpreted primarily as the Axis basically losing its capacity, especially in this case, and of course also Iran’s allied Shia armed groups in Iraq. None of which had any involvement in the war. 

That gave rise to the interpretation that this is actually the end of the Axis. We know that what had actually worked as the main deterrent for Iran vis-à-vis Israel was probably not its own missiles and drones, but the presence of Hezbollah, also armed with Iran-made missiles and drones. That was interpreted as basically the weakening of Hezbollah as a very important condition that enabled the Israeli war on Iran in June ’25.

I was among the ones who argued at the time that there were more nuances in this whole picture. To me, the main reason why the Axis was rather inactive in the war was that the threat to the Islamic Republic, to the Iranian system on one side and to the other members of the Axis on the other side, was not existential yet. 

We did see, of course, already last June, a round of decapitations against senior Iranian officials. We did see the targeting of Iran’s main nuclear facilities, but at the same time, it didn’t amount to a sense within the Islamic Republic that the system or the regime was on the verge of collapse. Same was the perception on the side of other members of the Axis—what is left of it, of course, which includes Hezbollah, the more pro-Iran camp within the Iraqi Shia militia landscape, and also the Houthis. That was the main reason. 

On the other side—and this is something that I hear argued by some Iran-based commentators close to the government—the whole network, especially in this case Hezbollah, was at the time in the process of revival and rethinking in terms of strategic orientation and structure.

So that still wasn’t the right time. But this time it was different in many respects. On the one side, it appears that the process of restructuring Hezbollah, especially in terms of its command and the way of war, has reached a decisive point. The Hezbollah that we are seeing right now engaging with Israel in southern Lebanon and northern Israel is much different than what it was two or three years ago under Nasrallah. 

Let’s say it has, in a way, gone back to its roots in early 1980s asymmetric warfare. Iran itself went through significant restructuring of its own command and control, decentralization of missile commands, etc., that we saw effectively enabling a very rapid and effective response to American and Israeli attacks. That was also a result of this whole period. 

Essentially, the sense of threat was visible all around, not just in terms of material elements, like the Iranian regime being on the verge of collapse—which in some cases the perception was that it was—as a result of a combination of internal and external pressures. And that was why it went to the extreme in targeting not just U.S. bases and Israeli targets, but also energy infrastructure in the region and all over.

So there was a sense of existential anxiety. On the side of allied groups, especially the Shia members in this case, the killing of Khamenei, the Iranian Supreme Leader, was also seen as a termination point of what I see as Shia anxiety. Someone who was not just a political leader of a country but also had many followers in the Shia world being targeted. These were the reasons why we are now seeing a restructured Axis primarily centered on its Shia actors. Iran itself, the Iraqi Shia militias, and Hezbollah are now active. The Houthis seem to be in reserve, somehow. But it seems that there’s a disconnection at this point between the Shia side of the Axis and the Palestinian groups like Hamas and others, who are now operating in a totally different environment in the post-October 7th reality.

A.F: I have a small follow-up for this question, as they are reviving with a focus on the Shia side of things. Do you think that these groups have the organizational capacity and the weaponry needed to be an effective fighting force within the Axis? Because we’ve seen over the past three years of war a real whittling down of these organizations. Do you think they have the ability to rebuild in this context?

H.A: Well, the main question here would be how we define effectiveness in the military sense of the word. 

I think one reason that the Axis ended up in that state of paralysis or semi-paralysis by the end of 2024—and I’m speaking of course of the erosion of Iran’s own deterrence by that time as a result of tit-for-tat attacks with Israel, the significant weakening of Hezbollah after the killing of its commanders and especially Nasrallah himself, and also the fall of Assad. 

One main reason for that was that the Axis had become too entrenched in the politics and economy of the host countries, which somehow limited the military effectiveness of these groups. 

Almost all of which had essentially emerged in their initial phases as very small guerrilla groups, operating in response to either occupation or foreign invasion, as in the case of the Iraqi armed groups or the Houthis.

That means that, for example, in the case of Lebanon—and again, this is something that I hear clearly from pro-Axis experts and commentators, not just in Iran but also in other countries, when they speak about what went wrong regarding deterrence being eroded and leading to the killing of commanders—they speak about Hezbollah having too many considerations in joining the fight in support of Hamas. They feared that the war would spill over into Lebanon and become destructive for the Lebanese society, which in the end happened. But caution somehow led step-by-step and in an incremental way towards the same scenario, while essentially depriving Hezbollah of the capacity to use what it had. 

So, in a very strange way, the fact that these members of the Axis now seem to have much less to lose has resulted in more military effectiveness. And of course, the innovative way of using technology—like what we are seeing in the case of Hezbollah using FPV drones—and continued Iranian support contributes to this. 

This restructuring means that they have now evolved into a network of smaller groups. Iran itself is of course excluded from the “smaller groups” definition, but in a sense they are more agile, more asymmetric warfare-oriented, and focused more on imposing costs on adversaries rather than necessarily shaping the dynamics of the countries where they are involved, because the constraints are real. So this is an adaptive process, I would say.

A.F: Okay. Now, shifting slightly from the Axis of Resistance, I wanted to hear more of your thoughts on where the Gulf States are standing. A lot of their relationship with the United States was based on a security guarantee, and now it seems that the United States has triggered a war that has resulted in a lot of destruction on the side of the Gulf States, calling into question: “Why did we cast our lot with the United States?” 

Do you think this will prompt a change in relationships? We’ve seen very recently the Financial Times report, which is unconfirmed from the Saudi government, about a potential Middle East non-aggression pact. 

What is your perspective on these types of movements with regard to where the Gulf States are going to be positioning themselves toward Iran?

H.A: Well, I think one of the other implications of the post-October 7th developments was that there’s no such thing anymore as a “Gulf position” or a GCC position. 

At the political level, or rather publicly, they still try to show unity and the contacts still continue, but the rift is real, especially between two heavyweights: Saudi Arabia on one side and the UAE on the other side. 

This is something that I have discussed in one of the chapters of my book, which is also titled The Axis of Resistance, that one of the underlying issues that was reflected in but also impacted by the October 7th developments and its aftermath was something that I call the “clash of orders”. There have been at least two diverging and competing views of regional order: one by Iran and the Axis of Resistance, and the other by Israel and supported by the U.S. The Gulf States, for quite some time, tried to position themselves somehow in between. 

But after that, and as a result of the weakening, at least materially, of the Iranian vision, Gulf States started to rethink and reposition themselves in this whole landscape.

On the one hand, we saw a growing partnership between the UAE and Israel. That was, of course, already the case with the Abraham Accords, but that went into some concrete steps that were rather difficult to imagine before, given the concerns that the UAE and Bahrain had regarding Iran—like the IMEC corridor and the UAE’s eagerness to be involved in it, and also security cooperation. 

But at the same time, Saudi Arabia started to distance itself from what would seem to be a more convergent landscape of Arabs and Israel. The normalization between Saudi Arabia and Israel seems to be totally off the table at the moment, and there’s a growing threat perception—not just by the Saudis, but also shared by other heavyweights in the region like Egypt and Turkey, and supported by Qatar—that they are now seeing Israel as a threat to regional security and regional balance. This is the shifting landscape that we are seeing right now. That explains why, for example, already in this war and its aftermath, Saudi Arabia has been very supportive of the Pakistani initiative to push the U.S. and Iran toward a deal, but the UAE has a different view.

So this is important to understand. As a result of that, I think the October 7th aftermath and now the Iran war has widened the gap between these countries. Now, the region is being restructured in a way that, conceptually, is still dominated by the logic of the balance of power between different actors, but the poles in this regional balancing have shifted. We still have Iran in a reconfigured way, especially if it comes out of this war establishing some credible control over the strait, and the very fact that the regime was not destroyed or changed as a result of this war. So we still have the Iranian vision. We have a Saudi, Pakistani, and Turkish view on the other side. And then we have the Emirati-Israeli axis. These would be the main nodes, and smaller actors, either in the Gulf or in other parts of the region, will somehow try to position themselves as closer to one of these camps or try to balance between these different actors on different norms.

A.F: So going along with that, what is Iran’s primary goal at the moment? It seems that they have overcome the existential threat that the United States was originally wielding. We’ve come down from that; the regime is still intact. 

If Iran could come out of this with a peak, perfect regional alignment, what do you think that would look like? What are they trying to pursue?

H.A: Since the start of this war, Iran has pursued three interconnected goals. 

The primary goal was regime survival, and it still is. The reason why I’m saying it still is, is because of course the Islamic Republic managed to survive this war, let’s say, and the new leadership seems to be pretty much in control. But economic difficulties, like the gap between state and society, all these issues still remain. That’s one of the reasons why they are now still in this process of diplomatic negotiations with the United States; they need sanctions lifted. They need some economic dividends as a result of a diplomatic track in order to be able to effectively govern the country. So that has been the first objective.

The second objective is the reestablishment of deterrence in a sense that would guarantee that a war like this would not happen again. That’s one of the reasons that we are hearing the Iranian position emphasizing the need for guarantees and also control over the Strait of Hormuz as leverage. Or, on that matter, also the Iranian reluctance to ship their stockpile of highly enriched uranium outside as an upfront concession. 

So there’s a delicate positioning, a delicate balance here that Iran is trying to preserve. They need to maintain enough leverage to make sure that a war like this would not happen again. 

But it’s not only related to that; it also has to do with trying to impact the regional equation, especially around the Strait of Hormuz, by building on the gaps that I mentioned between different actors. For example, reaching out to the Saudis while increasing pressure on the UAE and Bahrain, and at the same time trying to coordinate with Oman some sort of a post-war arrangement for the Strait of Hormuz.

And here comes the third objective, which is a desire to change the regional equations—to redraw the lines of geopolitical competition and cooperation in the sense that Iran could reestablish and reaffirm the position that was being weakened in the period between early 2024 (especially from April 2024, let’s say, when the first direct Israeli attack on the Iranian position in Syria happened) up until this war. 

So these three objectives explain what Iran is doing at the moment, from reaching out to some Gulf countries and trying to counterbalance different pressures from the region, to its position in the talks with the United States regarding nuclear and other issues. This is the way that I would describe the landscape at the moment.

A.F: Understood. Well, that’s all the questions that I had for you today. I do want to open the floor in case there was anything that you wished to talk about that I didn’t cover so far.

H.A: Well, there’s a lot of issues we can talk about, but I think the core issue here is that the recent U.S.-Israeli war on Iran has already started to have implications beyond the immediate battlefield and beyond Iran. This all has to do, I think, with the miscalculation on the side of the United States, especially in starting a war that they don’t know how to end. 

But what’s important here is that even if the Islamic Republic and the United States manage to reach an agreement, and even if proposals—like the one that you mentioned reportedly raised by Saudi Arabia on establishing a regional framework like the Helsinki Accords did in Europe—even if all these go well and there’s a bilateral agreement between the U.S. and Iran, and an agreement at the regional level, as long as the underlying hostility between Iran and Israel persists, I think it would still be too soon and too optimistic to speak about a stable regional setting. Both sides, Iran and Israel, see this battle as existential now, even more than before.

One could argue before this war that the sense of existential threat was more prominent on the Israeli side because they were constantly under the threat of Iran’s allies like Hamas, Hezbollah, etc. 

But now after two wars, it is even more the case on the Iranian side. So this enmity, this hostility, I think can manifest in different shapes and forms. For example, going back from the open to the shadows, to the gray zone. But this is not going to be solved anytime soon. 

It remains a central point of contention in the region, around which all those other dynamics that I mentioned are unfolding at the moment, and would be understood and developed.

A.F: I think you’re very correct. The ramifications of this war are certainly going to be long-lasting. 

But I want to say thank you very much for taking the time to speak with us today and to give us your very thoughtful perspectives. We greatly appreciate it.

H.A: Thank you. It was a pleasure.

A.F: Thank you very much. 

Thank you again to Dr. Azizi for taking the time to speak with us today. And thanks to you, listener. We hope you enjoyed this episode of CR Amplified.