Blain’s Morning Porridge June 15^th, 2026 – AI Shut-downs, and the Iran Peace Deal – what does it all mean?

“Tonight, there’s going to be a jailbreak… don’t you be around…”

There were a number of “Moments” over the Weekend. A Peace Deal in the Gulf was inevitable – but we will see energy supply chains slowly normalise and lower inflationary expectations. Equally important is the US Government switching off Anthropic’s most powerful AI models. Collectively, these two events could have enormous consequences in terms of global power and hegemony.

LINK TO PODCAST

Cage Fighting on the White House lawn seems the perfect metaphor for our times. Scotland beating Haiti at 4 am on Sunday morning at the World Cup was probably less significant, but very, very satisfying.

That was a busy weekend. The peace deal between the USA and Iran is a fascinating lesson of the consequences of unconstrained power. The fact the US Government effectively turned off Anthropic’s Fable 5 and Mythos 5 AI models was a pivotal event – and could impact the coming AI IPOs, the global adoption of US AI models, the future path of AI, and the ongoing exceptionalism of the US Tech Sector.

Let’s start with AI.

Interesting number for you. Anthropic’s $965 bln valuation is about 3 times the size of the whole Indian IT sector. (Thanks, James Eagle, for spotting that one.) Indian engineers and data scientists are leaders of the AI development labs, and the domestic tech sector is strong and mature – yet it’s worth a fraction of a recent US start up?

On Friday evening Anthropic was forced to shutter its most powerful Mythos 5 and Fable 5 AI after the US Government used export-control regulations to stop it giving foreign nationals “inside or outside the USA”, to access the models – and the only way to do so was to shut them down completely. Effectively, it’s a declaration US AI leadership is a valuable national resource to be protected by security policy as if it was a state/military secret. Fair enough.

But it’s a wake-up call – a bit like the rumoured “kill-switch” on US F-35 Lightning Fighter-jets operated by foreign air-forces. This morning global firms and governments will be waking up to the reality that the AI boom could prove an Achilles Heel if the US decides to exercise its power to throw the switches. AI is clearly a strategic resource. (There are multiple modern tech strategic resources, as the Russians discovered when their access to Starlink was switched off!)

Will it become too risky to use US AI models? How difficult will it be for Europe, and South-East Asia to develop and innovate their own independent AI systems? The ban should be heightening discussions about ring-fencing data and capabilities through the innovation of internalised open-weight Small Language Models rather than adopt the data-centre driven US hyperscale LLMs – which many suspect ultimately seek to achieve dominance by charging extractive rents on users to utilise their AI capabilities.

The trigger for the sudden, unprecedented Government demand to close the Anthropic models seems to have been linked to Chinese actors seeking to reverse engineer the Anthropic models (“distillation” as it is known), and the risk of “jailbreak” – which is when guardrails around an AI model can be bypassed. The power of the new Anthropic models to uncover hacks and cybersecurity vulnerabilities meant the current versions of the models blocked these features.

Interestingly it was Amazon that “shopped” the jailbreak security risks to the Government. Anthropic is Amazon’s favoured AI development Lab partner – so the jailbreak risks must have been real and significant.

All of which may leave investors somewhat perplexed ahead of the massive Anthropic and OpenAI IPOs set for later this year. In the wake of the SpaceX blowout IPO last week, the expectations were high for both AI development labs. Will that the remain the case, or will shuttering Mythos prove a major speedbump?

Thus far AI has been an unconstrained drag-race as the leading AI Labs, Open AI and Anthropic, have been chased by the hyperscalers’ infrastructure build out (literally trillions of dollars) as the pace and ambition of AI development has bounded forward. That’s what’s been driving the froth across AI valuations. This isn’t unusual in new technologies – the greatest and swiftest capability gains come in the early stages.

From my sailing career I know you can learn to sail a sailboat to 95% of its potential in the first few weeks. But harnessing the last 5% can take years. Same thing may be happening in AI in terms of how marketable it is. Perhaps the big narrative capability leaps have already happened, or, as the jailbreak risk highlights; they have advanced so quickly they’ve left considerable friction and instabilities in their wake.

It’s been the speed of AI creation that spurred the narrative around the pace of adoption of AI within workplaces, again driving these stupendous valuations across the AI ecosystem. What if the blocking Mythos and Fable is the check that punctures the bubble? The sudden hard-stop, and fears of deepening regulatory oversight, the kill-button on foreign users, and the distillation risks will all suddenly be weighing on investors.

Scuttlebutt on the market this morning is the Anthropic IPO might have taken a significant dent from the shut-down. The pre-IPO stock took a 4% in synthetic “contract” markets, but other analysts think a 20% drop in its current $1 trillion pre-IPO value is possible – which will be reflected on the OpenAI price as well.

Watch this space.

Iran – 60 days till resolution

The current Gulf ceasefire will be extended by 60 days to complete negotiations. Shipping experts reckon it could take months for normal transportation to resume, for depleted stocks to be brought up to speed, and for terminals to reopen fully. Some of the issues are banal, like scrapping the barnacles off tanker’s hull, to the number of ships that have been redirected to other routes. However, the markets are reacting positively to the removal of the main driver of the inflation spike.

One of the factors to watch is just how much the War and the consequences of the Peace will impact the US mid-term elections in November. My Republican chums reckon the removal of the inflationary impetus, and Trump solving the war, should see him weather the midterms strongly.

That sounds like a vague hope expressed as an irrefutable truth. Trump’s best chance of avoiding the lame-duckery that will follow losing both the Senate and Congress is that the Democrats will fail to maximise the electorate against him. Given the Blue Team’s unparalleled ability to snatch defeat from the jaws of victory, don’t underestimate Trump’s ability to sweep the Iran war under the proverbial carpet. No doubt he’ll be calling it the greatest win in history.

Iran’s news agency Mehr published the 14 clauses of the Memorandum of Understanding they say was agreed between the USA and Iran and will be signed later this week in Switzerland.

To be brutally frank – the MoU doesn’t look like even a draw, let alone the “unconditional surrender” the president blustered on about three months ago. It looks like a home win. Yet again, Iran says it has agreed to no nuclear weapons, but the details on how that will be monitored are sparse and to be finalised. There is no more talk about the USA taking control of these stocks.

The MoU does say the US and allies will pay $300 bln towards the reconstruction of Iran, sanctions will be lifted, the Strait of Hormuz will be reopened under Iranian arrangements, US forces will be withdrawn from around Iran within 30 days, and the US commits to non-interference in the internal affairs of Iran. That doesn’t sound like victory or regime change.

I’ve been told – by Iranian expatriates and supporters of the Reza Pahlavi, the deposed Shah’s son – that the Iranian economy is in shatters, the Revolutionary Guard are exhausted and demoralised, and turmoil is set to break out again following a peace treaty, creating all the conditions for a counter-revolution that will see the regime replaced.

Dream on. Having dealt with Iranian “businessmen” in 2015 (the last time Iran was to be reopened to global business), I expect waves of corruption will follow any reopening of the economy – everyone will want a slice. I found myself as part of an unofficial delegation discussing how to finance the rebuilding of Iran’s aviation and shipping sectors – but all that our counterparts wanted were “facilitation” fees and piles of cash to make introductions!

The bottom line is simple. In the US the political parties can argue whatever they wish, but what the rest of the World saw was Trump mount a fruitless and meaningless attack on Iran which he’s now been forced to back down from. They’ve seen the superb US military expending over $100 bln in war stocks making small pieces of rubble smaller still. They see Iran still in control of the strait and emerging from the war with a stronger hand in the negotiations. They’ve watched Trump visibly age through the process. They have more reasons than ever to fear for the real strength of America. They know the world is changing and changing fast. The Chinese wisely said little – not interrupting their enemy while it made mistakes.

Let’s see where we go next…

Out of time and back to the day job…

Bill Blain

Author of the Morning Porridge
CEO Windshift Capital
Advisor – Spitfire Strategic Capital

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