Israel Hopes to Trigger a Revolt in Iran

0:00Luke Vargas:I'm R.J. Decker, a private investigator uncovering the sunshine state's darkest secrets. Tuesdays, it's the premiere of ABC's hottest new crime show. R.J. freaking Decker as I live and breathe. He's a private eye. It's not a standard murder. It's someone bigger. And a public mess. Trying to get someone back to prison today?

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0:33Luke Vargas:Israel attacks Iran's police state, hoping to kick off a popular revolt against the country's leaders. Plus, a record drop for South Korean stocks as conflict in the Middle East drags Asia's economies. And James Tallarico wins Texas' Senate Democratic primary on a message of electability. The number of independents and Republicans who voted in this Democratic primary is unprecedented. This is proof that there is something happening in Texas. It's Wednesday, March 4th. I'm Luke Vargas for The Wall Street Journal. And here is the AM edition of What's News, the top headlines and business stories moving your world today.

1:19Luke Vargas:Israel says it shot down an Iranian jet fighter over Tehran this morning in what it claims is the first ever air-to-air shootdown of a manned fighter by an F-35. The journal's Margarita Stankati says that comes as Israel is also continuing attacks against Iran's police state, hoping that airstrikes can clear the way for a revolt against the country's rulers.

1:41Margherita Stancati:In the first few days of war, we have seen Israeli forces strike the headquarters, bases, and local command centers belonging to special police units and the ideologically driven Islamic Revolutionary Guard Corps, as well as the Basij militia, which are the street level enforcers of the Islamic Revolutionary Guards. And collectively, this sends a message that Israeli forces want to degrade Iran's ability to suppress internal dissent in the hopes that this could pave the way to another domestic uprising, another popular revolt that could ultimately lead to the toppling of the Islamic Republic.

2:20Luke Vargas:And Margarita has said that Israel's attacks aren't just centered on Tehran, but on Kurdish areas in western Iran, a key part of its strategy.

2:28Margherita Stancati:Kurdish and other ethnic minorities represent a particular kind of threat to the regime. Kurds in particular have a strong sense of community. They are in border areas and they're often armed. And there are also Iranian Kurdish fighters on the other side of the border in Iraq, which could cross into Iran should border security weaken and should there be a push to have a ground war as well. We know that Trump has spoken to Kurdish leaders in the region. We're not sure what they said, but there is a clear acknowledgement also from the Iranian side that this could be problematic for them. Iranian forces have struck Kurdish targets in Iraq, including Iranian Kurdish officers.

3:09Margherita Stancati:So there's a sense that this could become a next big potential frontline in the war.

3:17Luke Vargas:Well, another thing to watch is how long each combatant in the conflict can keep up the fight. While we're just five days into the conflict, we're already hearing questions about when Iran will exhaust its missiles, whether the Gulf states could run out of air defenses, and that despite mobilizing a formidable force in the Middle East, could American munition stockpiles run thin if fighting continues for weeks? Journal Defense Industry reporter Alistair McDonald has been looking into the military hardware that has shaped the conflict to date. Alistair, are things as dire as the above warnings might suggest?

3:51Luke Vargas:Yeah, I would say potentially. Things are potentially as dire as people say. Of course, it depends on how long the war goes on for. There's no way that either side can sustain a conflict based on just air munitions, missiles, drones, etc. for months and months. And it also depends on whether the U.S. and Israel can destroy Iranian stockpiles and its ability to produce drones. Obviously, the ballistic missiles Iran has are the most deadly and they're harder to take down. But you can knock out a Shaheed in less than a month. A Shaheed, these are these Iranian drones they've been using to good effect.

4:26Luke Vargas:That's right. One-way attack drones that have proved spectacularly successful in both the Ukraine war and here. I mean, the Shaheed, as you can see, is causing chaos amongst the Gulf states and have also been responsible for US deaths already. So they are very deadly, but also cheap and relatively easy to make weapon. What about rearming? We've heard some of the Gulf states say, we're fine here. We can get more weapons, air defenses if we need to. Is that the case? Depending on the weapon. So if you're talking about sort of a patriot interceptor, no, not really. Stockpiles were always pretty low and they've been under huge demand.

5:01Luke Vargas:So obviously the American needs its own magazine of these interceptors. And then some have been bought for Ukraine and Europeans themselves have them and the Gulf states have them. These things tend to take upwards of over a year to make and cost a million. They're very complex weapons. So the U.S. will have its own stocks and it would probably be able to last for a long time during this war. But what it doesn't want to do is finish this war and then have no magazine left for any future conflict. Alistair, this kind of ties in with what the chairman of the U.S. Joint Chiefs of Staff had warned about the U.S.

5:31Luke Vargas:potentially running out of munitions and our own analysis suggesting it could have just enough for a few weeks. Do we have a sense yet of which weapons are having the most impact on this conflict? They've shown us, repeatedly one of the lessons of the Ukraine conflict, that air defense is absolutely essential. But also what they've also shown us is that for all the excitement about drones, the US still wants to fight its adversaries with old school assets, manned fighter jets and naval ships. And what a US analyst would say is that the problem with Ukraine is Russia was never able to achieve air dominance.

6:03Luke Vargas:So it became this long drawn out land war, which is where drones then predominate. But what the US wants to do is it wants to come in and dominate the air and hit its enemy very hard from the start. And so the US has brought in a vast fleet of these sort of old school assets. It's two aircraft carriers, 13 destroyers, fleets of F-35s, F-15s, F-16s, the support aircraft, and the B-2 bombers also being used from US bases. And the air defence from naval vessels has been very important as destroyers knock out Iranian ballistic missiles and drones. And also the Navy's been used to launch tomahawks.

6:41Luke Vargas:So these old school assets still pack a bigger punch than your average drone. They typically have a larger reach. But then on the other side, of course, drones have proven very, very potent from Iran. And then obviously ballistic missiles. Alistair MacDonald covers the defense industry for us. Alistair, appreciate you as always. Thanks for the update. Thanks, Luke. Meanwhile, concerns about the length and impact of the conflict prompted a deep market sell-off in Asia this morning, with South Korea's COSPI index plummeting more than 12 percent and leading to two pauses in trading. Journal reporter Hannah Miao said that Asian economies are particularly dependent on oil imports from the Middle East.

7:21Margherita Stancati:South Korea's stock market in particular is quite sensitive to swings in oil prices. Its economy often relies on very heavy industry, which is reliant on oil. So the longer this conflict goes on, the greater the risk of disruption to their economies. And the other thing is that these stock markets have been really on a tear because of the AI trade. A lot of optimism that these companies are benefiting from the AI boom. And so now it's a bit of a reality check.

7:51Luke Vargas:Today's sell-off follows volatile trading in the U.S. and Europe yesterday, with U.S. stock futures pointing to a lower open this morning. Coming up, OpenAI's Sam Aldman defends the company's work with the Pentagon. That and the rest of the day's news after the break.

8:11Margherita Stancati:Hi, this is Alex Osola, host of the WSJ's What's News podcast. We bring you the biggest news of the day, from business and finance to global and political developments that move markets. If you're looking for more insights and tools to understand the latest headlines, consider becoming a subscriber to The Wall Street Journal. Visit subscribe.wsj.com slash what's news to subscribe now.

8:40Luke Vargas:Let's turn to Texas now, where the AP is projecting Democrat James Tallarico as the winner of a closely watched Senate primary, beating out progressive Jasmine Crockett. The 36-year-old state rep and Bible scholars victory is an early indication of Democratic voters' preferences ahead of the midterms, where Tallarico will face the winner of the Republican runoff set for May between incumbent Senator John Cornyn and Texas Attorney General Ken Paxton after neither secured a majority of votes last night. Journal National Politics reporter Sabrina Rodriguez has this report from Tallarico's election night party.

9:14Margherita Stancati:For Republicans, this has been a look at whether voters want to stick with some type of traditional conservatism or keep moving with a more MAGA-focused message. Paxton is beloved by the MAGA base and decided to challenge incumbent Senator Cornyn, who has been in Texas politics for roughly 40 years. On the Democratic side, Crockett is firebrand with a national brand for confrontations and the willingness to have confrontation with President Trump and Republicans. And Tallarico has been selling a message much more focused on his faith. He talks a lot about the politics of love. And for that, we see sort of a test of whether Democrats want a candidate who's trying to court the middle, who's trying to court moderates, conservatives, people who may be voted for President Trump in 2024, versus a candidate like Crockett, who has really pushed her focus on trying to fire up the base.

10:07Luke Vargas:The House probe into Jeffrey Epstein's network is intensifying, with Bill Gates, billionaire Leon Black, and Goldman Sachs departing General Counsel Katherine Rumler all being asked to testify about their ties to the deceased sex offender. Four other individuals in Epstein's orbit have also been called upon. Gates and Rumler both welcomed the opportunity to speak and have said they were unaware of Epstein's crimes. That sentiment has previously been echoed by Black, whose spokesperson didn't immediately respond to a request for comment. At the same time, the Justice Department has said there are over 47 ,000 Epstein files that remain offline for further review and should be ready for release by the end of the week.

10:46Luke Vargas:That comes after a journal report found that the DOJ withheld thousands of documents, including a woman's unverified allegations of sexual misconduct against Donald Trump. Trump has denied wrongdoing and said the Epstein files totally exonerated him. The Trump administration is expanding its campaign against drug traffickers in Latin America, launching a new joint operation with Ecuador. The U.S. Southern Command says the mission specifically targets groups recently designated as terrorist organizations. And speaking of military operations, OpenAI CEO Sam Altman has come under fire for a decision to allow the Pentagon to use its tools for classified work.

11:28Luke Vargas:That's after rival Anthropic pulled out of a similar government contract, taking issue with the use of its technology for mass surveillance and fully autonomous weapons. We exclusively report that Altman told staff that he didn't regret signing the contract, but that the timing looked opportunistic, coming just hours after Defense Secretary Pete Hegseth designated Anthropic a supply chain risk. Journal tech reporter Sam Schechner says the blowback comes amid a simmering debate among AI researchers on whether they can trust business leaders to responsibly deploy their technology. After OpenAI made this deal with the Pentagon, there was a groundswell of AI researchers at the company and then in broader Silicon Valley who spent the weekend criticizing him and the company.

12:11Luke Vargas:They saw it as a capitulation to the Pentagon after essentially agreeing to a deal that allowed AI to be used in all lawful cases. And internally, OpenAI employees were calling for the company to sign a different deal. and over the weekend, they actually worked on revising the deal. And Sam Altman, in an all-hands meeting, described himself as trying so hard to do the right thing and to get absolutely, like, personally crushed for it. And then he said that he thought it was the right decision, but that it had, quote, difficult brand consequences and very negative PR for us. According to Journal reporting, this weekend's strikes on Iran were planned with the involvement of Anthropik's Claude models.

12:54Luke Vargas:And that's it for What's News. for this Wednesday morning. Today's show was produced by Hattie Moyer and Daniel Bach. Our supervising producer is Sandra Kilhoff and I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.

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