Join 400,000+ executives and professionals who trust The AI Report for daily, practical AI updates.

Built for business—not engineers—this newsletter delivers expert prompts, real-world use cases, and decision-ready insights.

No hype. No jargon. Just results.

Subscribe free—trusted by leaders

What you need to know

China stages military parade on World War II anniversary

On 3 September 2025 Beijing held a grand military parade to mark the 80th anniversary of Japan’s surrender in the Second World War, an event the Chinese leadership portrays as the victory of the “War of Resistance Against Japanese Aggression” and a broader triumph of anti-fascist forces.

The spectacle, along Chang’an Avenue and Tiananmen Square, involved tens of thousands of troops in 45 formations, scores of aircraft, and an array of advanced weaponry, including the new DF-61 intercontinental ballistic missile, hypersonic strike systems, underwater drones, and cyberwarfare units, many displayed publicly for the first time.

President Xi Jinping presided over the ceremony, presenting China as strong and self-reliant. The guest list carried as much weight as the arsenal. Russian President Vladimir Putin, North Korean leader Kim Jong Un, and Iranian President Masoud Pezeshkian were seated prominently alongside Xi, signaling Beijing’s deepening alignment with Moscow, Pyongyang, and Tehran.

Leaders from the Shanghai Cooperation Organisation (SCO) and the Global South were also present, though Western leaders stayed away, reflecting discomfort with China’s effort to rewrite wartime history by diminishing the American role in Japan’s defeat and elevating that of China and the Soviet Union. The event was both a display of military power and a carefully staged act of historical reinterpretation and geopolitical theater.

Xi spoke for about ten minutes. He said that humanity’s future depends on countries treating each other as equals and supporting one another to avoid a return of past tragedies. He argued that the world now faces a stark choice between peace and conflict, dialogue and confrontation, cooperation and rivalry, and insisted that China stands on the right side of history. He concluded that China’s national revival is unstoppable and that the broader cause of peace and development will prevail.

President Donald Trump, writing on Truth Social, commented:
“The big question is whether President Xi of China will acknowledge the immense support and “blood” that the United States of America gave to China to secure its freedom from a hostile invader. Many Americans died for China’s victory and glory. I hope they are rightly honored and remembered for their bravery and sacrifice. May President Xi and the people of China enjoy a lasting day of celebration. Please give my warmest regards to Vladimir Putin and Kim Jong Un as you plot against the United States of America.”

The parade followed the SCO conference over the weekend, which illustrated China’s leadership of a loosely structured but growing bloc of countries that are rivals of, or opposed to, the U.S.

Yesterday, in Helsinki, during a meeting with Lithuania’s President Gitanas Nausėda, Finland’s President Alex Stubb said: “If Europe and America do not adopt a more cooperative foreign policy towards the Global South and India, then we will lose. The SCO meeting in China is a reminder to the West of what is at stake.”

Move fast and break things

Trump defends his health and announces Space Command move

President Donald Trump’s Oval Office press conference on 2 September 2025 lasted nearly an hour.

He announced that U.S. Space Command’s headquarters will move from Colorado to Huntsville. He was joined by Vice-President J.D. Vance, Defense Secretary Pete Hegseth, and Alabama’s senators.

Pressed about possible federal troop deployments inside the U.S., Trump said of Chicago, “We’re going in,” though he gave no timeline or details. Illinois Governor J.B. Pritzker later described the remarks as “unhinged.”

Trump also described a U.S. operation in the southern Caribbean in which naval forces targeted a Venezuelan vessel allegedly transporting narcotics, killing 11 people. This marked the first publicly acknowledged action since the deployment of U.S. warships to the region.

On domestic policy, he said his administration would seek an expedited Supreme Court ruling after an appeals court deemed parts of his tariff program unlawful.

The president also dismissed online speculation about his health, calling the claims “fake news.” He pointed to a weekend filled with golf, media interviews, and social-media activity as evidence of vigor. Reporters noted bruising on his right hand and swelling in his ankles. The White House attributed these to vigorous handshakes and chronic venous insufficiency, a benign condition common in older adults. His spokeswoman stressed both were harmless. Trump’s physical condition appeared stable, though his remarks were meandering and loosely structured, especially when describing his weekend, this is normal. Reporters noted his tendency to digress, using humor and anecdote in place of concise answers, which is also normal for Trump. When a reporter noted that he had been out of public view for a couple of days, Trump replied: “Last week I did numerous news conferences, all successful… Then I didn’t do any for two days and they said, ‘There must be something wrong with him.’ Biden wouldn’t do ’em for months, you wouldn’t see him and nobody ever said there was ever anything wrong with him.”

Pentagon to send lawyers to immigration courts

Defense Secretary Pete Hegseth has approved the deployment of up to 600 military lawyers, including both uniformed personnel and civilian attorneys, to the Department of Justice. They will serve as temporary immigration judges in an effort to relieve the backlog in the nation’s immigration courts.

The first cohort of 150 attorneys is expected to be identified by next week, with further groups to follow on a rolling basis. The plan reflects growing concern in Washington over the strain on the immigration system, which faces hundreds of thousands of pending cases. By lending personnel to the Justice Department, the Pentagon aims to accelerate hearings and reduce waiting times that can stretch for years.

Such a move is unusual, though not without precedent. The U.S. military has occasionally provided legal assistance to civilian agencies during crises, such as natural disasters or surges in asylum claims. Critics, however, caution that using military lawyers in civilian courts blurs institutional boundaries and risks politicizing the armed forces’ legal corps. Supporters argue that the extraordinary backlog justifies extraordinary measures, especially at a time when immigration has become a central political battleground.

Court rules Trump and Hegseth violated Posse Comitatus Act

U.S. District Judge Charles R. Breyer, appointed by President Bill Clinton, has ruled that President Donald Trump and Defense Secretary Pete Hegseth violated federal law, specifically the 1878 Posse Comitatus Act, when they deployed federalized National Guardsmen and Marines to Los Angeles in June.

“The evidence at trial established that the defendants systematically used armed soldiers, whose identities were often obscured by protective armor, along with military vehicles to establish perimeters and traffic blockades, conduct crowd control, and maintain a visible military presence in and around Los Angeles. In short, the defendants violated the Posse Comitatus Act,” Breyer said. He added that the deployment of federal troops had effectively created a “national police force with the president as its chief.”

As part of his ruling, Breyer issued an order prohibiting troops from participating in security patrols, riot control, arrests, searches or crowd control anywhere in the U.S., beginning on 12 September.

America First

Markets soar as central banks cut rates but bond yields climb

Alphabet’s stock rose by more than 5% after a judge ruled that the firm would not be required to divest Google Chrome.

The ten largest U.S. stocks reached a record market capitalization of $22.7 trillion in August. If combined into a single exchange, they would form the world’s second-largest stock market. Their value now exceeds that of China and the European Union, and is three times greater than Japan’s. Together, they account for 40% of the S&P 500’s market capitalization, the highest share on record. Even the top five (Nvidia, Microsoft, Apple, Alphabet and Amazon) are worth more than all stock markets outside the U.S.

The Federal Reserve is expected to cut interest rates in 15 days, marking its first move of 2025.

Yet the yield on the 30-year Treasury bond is hovering near 5.0%, reflecting investor unease.

Global bond markets are flashing warning signals. Japan’s 30-year yield has risen to 3.25%, its highest level ever. Britain’s 30-year yield has breached 5.70% for the first time since April 1998, despite the Bank of England having cut rates five times in the past year. In France, the 30-year yield climbed above 4.5% for the first time since 2011.

The delinquency rate on commercial mortgage-backed securities (CMBS) tied to commercial office space surged by 62 basis points in August, reaching a record 11.7%. That is a full percentage point above the post-2008 peak of 10.7%. Since December 2022, the rate has climbed by more than 10 percentage points. Multifamily CMBS also showed strain, with delinquencies rising by 71 basis points to 6.86%, the highest level in nine years. Analysts warn that the downturn in commercial real estate is unfolding more quickly than it did in 2008.

Meanwhile, gold is reaching daily record highs, bond yields are climbing to levels not seen in more than two decades, and the S&P 500 is moving toward 7,000. Markets appear to accept that G7 countries will face inflation above 3% for years, even as deficit spending accelerates.

When interest rates fall but long-term bond yields continue to climb, something unusual is happening in the global economy.

U.S. strike on alleged drug vessel raises questions

Secretary of State Marco Rubio said the U.S. military “conducted a lethal strike” against an alleged drug-smuggling vessel in the southern Caribbean.

Standard procedure in such cases has been to stop and search vessels, then sink them if drugs are found. The phrase “lethal strike” suggests that this time the military attacked the craft outright, without allowing the crew the chance to surrender.

The Cártel de los Soles, which is tied to Venezuelan President Nicolás Maduro and is alleged to have been operating the boat that was sunk, was designated as a foreign terrorist organization by the U.S. Treasury in July.

The strike may well raise legal questions over the rules of engagement in such cases, though it’s hard to see drug cartels enjoying much success in American courts.

The recent strike will have not gone unnoticed by rival cartels, which must be already weighing its implications for their own trafficking operations.

It’s America vs China, everyone else needs to choose a side

Ukraine hit by Russian strikes as Putin meets Xi & Kim, ground war remains stalled

Ukraine is under heavy drone and missile attack for at least the third time in two weeks, coinciding with Russian President Vladimir Putin’s meeting in Beijing with Chinese President Xi Jinping and North Korean leader Kim Jong Un.

The Russian military command has also redeployed naval infantry and airborne (VDV) units, regarded as among its more capable forces, from northern Sumy Oblast and the Kherson direction to Donetsk Oblast. The redeployments suggest that Russia’s new autumn 2025 offensive will concentrate on attempting to seize the remaining parts of Donetsk Oblast, particularly around Dobropillya, Pokrovsk and Kostyantynivka.

Ukrainian forces advanced near Pokrovsk, while Russian forces pushed forward near Kupyansk, Novopavlivka and in western Zaporizhia Oblast.

Overall, for the horrendous human cost, Russia’s ground offensive this summer has been a failure.

“It is a disgrace. Not a single section of the front was broken through this summer. We spent 16 months storming Chasiv Yar, and the result is zero. Meanwhile, Ukraine has allowed young people to travel abroad. If Ukraine were truly on its last breath, they would already be drafting 16-year-olds, but things are going well for them,” said Igor Girkin, also known as Strelkov, an infamous former commander of Russian separatists in Donbas, speaking from prison.

Center of Gravity sign up link: https://www.namea-group.com/the-daily-brief