July 21, 2026

Dystopic Newsletter

What the Hell Happened? A Mid-Year Report

Every January for the past 5 years, I’ve produced a list of predictions. The focus of these predictions is the same as my Newsletter: the technology behind Topday’s new headlines. Since much of what drives the world is energy, communications, and aerospace/defense, and with an accelerating 2nd Cold War, the factors for and against military action have entered the discussion.

It’s July, midyear, and time to see how well the predictions in What the Hell Is Next? 2026 Predictions have held up. We’ll also add some additional midyear predictions, given the chaotic pace of events in the modern world.

But first, some viewpoints from China …

China – Viewpoints From My Annual WPC Member Meeting

As part of my long career in technology, my work not only involved developing new technology but also included leading International Standards Organizations to make that technology accessible to everyone. A few examples

• IEEE for the development of WIFI and later pre-4G cellular (Co-Chair for both efforts)
• 3GPP for the development and rollout of 4G (Co-Chair)
• CableLabs for DOCSIS 3.0 cable modem standard -have cable internet, you are using a DOCSIS3.x modem today

Developing long-term technology roadmaps and delivering world-changing technology, working with a cadre of the best engineers from the most innovative companies worldwide, provides an unparalleled breadth of perspectives and understanding that carries through to my writing.

Today, I’m the Managing Director/CEO of the Wireless Power Consortium. WPC oversees the Qi consumer wireless power standard and the recently released Ki cordless kitchen. Nearly 2 billion smartphones and chargers are powered by Qi2, our latest standard, and sales are approaching a billion units annually. Apple, Samsung, Google, Huawei, Xiaomi, and nearly every smartphone company are members, along with Tesla, Mercedes-Benz, GM, Ford, and other automotive OEMs and their suppliers. We have over 350 member companies and over 2000 engineers participating in our standards development. Roughly 160 of these companies are based in China.

Every year in mid-July, I host WPC’s annual China Meet-Up. I just wrapped up this year's meeting at the Hilton Shenzhen Shekou Nanhi. Over 120 engineers from 60 of our 160 member companies attended. I also took the opportunity to meet with individual company members, including BYD (auto), Zone Charge (Ki), Anker, Ungreen, Adyao (auto), and Huawei.

Between the formal meetings and informal dinners, I gained some interesting perspectives that I thought I’d share:

• The Chinese economy is doing poorly. At least from the perspective of everyone I met with. Most Chinese had their investments tied up in real estate rather than equities (stocks) – they are not spending. While exports are doing well (China is dumping products worldwide), domestic consumption has fallen off a cliff. WPC members are in the consumer electronics business and are reporting overall sales that are 20% lower than last year.
• Tariff and Trade War. China produces roughly 90% of the consumer electronics in WPC’s space. Since tariffs hit every company, they all simply passed the cost on, and Western consumers, for the most part, paid the price. There was a knock-on effect: Chinese companies are now investing in offshore production facilities in low-tariff countries such as Vietnam and Poland. The job market, especially for younger Chinese people, is weak. While Western countries experience a similar reduction in opportunities for younger workers, the decline is far more pronounced in China and similar to that in the EU. Youth unemployment rates are roughly 9.2% in the U.S., 15.2% in the EU, and 15.6% in China. China changed its formula to exclude full-time students from the numbers, treating the data fundamentally differently from the U.S. or Europe. The actual unemployment rate is likely much higher than the published rate. In China, competition for white-collar jobs and a mismatch between the degrees graduates hold and the economy's needs.
• Western IP (Intellectual Property) enforcement is significantly affecting profits. To counter China’s manipulation of the Yen and its underwriting of export loans, countries are raising tariffs, and Western companies are filing aggressive IP enforcement claims against Chinese manufacturers. Courts are supporting these claims. Data from several of my member companies show that up to 50% of profit margin is being lost to licensing and infringement.
• Economic Distortion and Fallout from CCP Policy. In the West, there are numerous complaints about capitalism and its uneven distribution of wealth. Many believe the Chinese Communist Party (CCP) policy of directed capitalism is superior. When the CCP deems an industry important, a flood of local and central government investment creates 100s of companies with little financial scrutiny compared to Western VC-backed companies. Most companies are not viable and are running on essentially free money. When the CCP changes focus (i.e., the next 5-year plan), the money runs out, and a massive crash occurs. 5 years ago, electric cars were a CCP priority, leading to the creation of over 129 EV companies. Today, AI and Robotics are the news, CCP-favored industries, and financial analysis predicts that at best 15 of those manufacturers, including BYD, NIO, Geely, Huawei, and Xiaomi, will survive.

The grass is always greener on the other side … The media in the West promotes a narrative of Chinese economic superiority. It is a massive distortion. My Chinese friends and business associates are envious of our economy and our clear, enforced business and IP regulations. They are concerned about the distortions and economic fallout that a policy-driven economy entails. We have economic problems, but we also have a direct say

in how to fix them. Business and government face regulation and input from us, the voting public. My Chinese friends have NO SAY AT ALL.

On a final note, the more I travel, the more it seems that, despite different cultures, people are the same. They worry about their jobs, their families' security, and their children's future. What differs is who governs the people. Democracy is messy and infuriating; however, you do get a say in how the nation moves forward. In a dictatorship, even a benign one, you have no say… It is an incredibly important distinction that seems lost on many who do not travel the world and work with and spend time with people across the globe.

What the Hell Happened? An Update on my 2026 Predictions

In case you missed the Dystopic 2026 Prediction Issue, you can find it HERE​

As I noted at the beginning of the year, the World has become very chaotic. Three factors are in play:

• Geopolitics: The US-led West is competing with the “Axis of Tyranny” (China, Russia, North Korea, and Iran) both economically and militarily for spheres of influence. The large nonaligned powers, India and Brazil, are caught in the middle. Ukraine, Taiwan, and Iran remain hotspots in the geopolitical landscape.
• AI: Large Language Model (LLM) AI began rivaling humans in many tasks in 2025. Physical AI is following LLM AI, with robotaxis and humanoid robots. “The Machine Age” is upon us, and we will all need to adapt to the 4th industrial revolution. What to understand more about robotics and AI? Checkout the dystopic 3 part series, The Machine Age​
• Tariffs: An intentional act by President Trump is still reverberating across the global economy. This should be settled by the end of 2026. The question is: what is the end state for the global economy? The US is not alone in the tariff game. China's massive production capacity is creating barriers worldwide to protect local economies from Chinese “dumping.”

I was spot on that these three factors have indeed guided the major events, and at mid-year we can say that geopolitics, specifically the war in Iran, has added another factor: ENERGY. Energy is in turn fueling inflation. Inflation may well hand President Trump a loss of the House and Senate in the fall.

Based on these factors, I made the following predictions

1. Putin continues to refuse Trump’s peace initiatives – with consequences
2. Iran is unfinished business: maximum pressure sanctions and a green light for Israel to strike again.
3. As Venezuela falls, so falls Cuba and Colombia?
4. The US will waive its “big stick,” and Colombia will back down
5. The summit between Chinese President Xi and US President does not go well. Seeing the US commitments in Latin America and Iran, Xi begins a blockade of Taiwan, at least a year, if not 2 years, earlier than expected.
6. AI consolidates and experiences a correction, but not a crash
7. Back to the Moon – another banner year for the Space Economy

The real question is how have these predictions panned out so far? So here we go …

Prediction 1: Putin continues to refuse Trump’s peace initiatives – with consequences

Accuracy of prediction: 100%

It was no surprise that Putin rejected the generous offer the US put on the table at the start of the year to end hostilities in Ukraine. As I have noted on many occasions, authoritarian dictators historically do not negotiate, and Putin is no exception. At this point, Putin has removed the possibility of peace talks and a long-term settlement.

The big surprise in 2026 is how effective Ukraine's new long-range energy campaign is, targeting refineries and oil infrastructure with intermediate-range cruise missiles and drones of Ukraine’s own design. Instead of losing ground by blocking supplies and fuel to the front, Ukraine is gaining ground on the Russians.

As predicted, Trump would give up on negotiations, and Putin's deliverance would heal, at least in part, the division between the US and NATO.

Prediction 2: Iran is unfinished business: maximum pressure sanctions and a green light for Israel to strike again.

Accuracy of prediction: 80%

I predicted that Israel would go to war. As it turns out, the US and Israel would go to war. It was a brilliant leadership decapitation strike and precision war against Iran's military and nuclear facilities.

Unfortunately, President Trump made one of the largest strategic miscalculations in history. He assumed, as with Venezuela, that Iran would fold and negotiate. Like the Japanese in World War 2 after Pearl Harbor, Venezuela created its own form of “victory disease” for the US commander and chief. He could not have been more wrong in reading the situation. He ended the US military campaign far too early, when he needed to press harder and destroy segments of Iran's energy and transportation economy to put maximum pressure on the remaining regime. After over 3 months of wasteful, unproductive negotiations, Iran was able to hold the Strait of Hormuz hostage, create an energy crisis, and ignite global inflation.

At the time I noted:

Unfortunately for the Iranian people, they now have a more militant government.

Trump finally resumed hostilities just over a week ago. However, the strikes are limited; to date has refused to launch a scorched-earth campaign against Iran's energy and transportation sectors. If we want peace, it will only happen through an extended campaign and the economic destruction of Iran.

Does President Trump have the stomach for that? He keeps holding back.

If not, are we now in a forever war holding Iran in check?

The US midterm elections will tell the tale. If Trump loses the House, he will face impeachment and be forced to withdraw from the Strait of Hormuz. If he holds the House, he still has time and options to successfully conclude the war.

Trump could end the war in a single day if he were willing to take extreme action. He could execute a “Nuclear off-ramp” that would limit civilian casualties while effectively and permanently ending Iran's nuclear program. I outlined this hypothetical scenario in the Dystopic newsletter: Ending the Iran War – The Nuclear Off Ramp Option​

We didn’t need to be at this point, but here we are, in a self-inflicted mess.

Even worse, President Trump has lost nearly all of his credibility vacillating on negotiations or war. Credibility is the foundation of deterrence. So much for building US deterrence.

Moving forward, President Trump needs less talk and greater military execution against Iran's energy and transport infrastructure. He should take the advice of U.S. President Theodore Roosevelt to “Speak softly and carry a big stick.”

Prediction 3: As Venezuela falls, so fall Cuba and Colombia?

Accuracy of prediction: 100%

A historic US 36-hour campaign, and Venezuela fell. A truly amazing feat of arms. The knock-on effects immediately impacted Colombia's threats of armed intervention in support of Venezuela.

With both Colombia and Venezuela off the table, the US began an anaconda-like squeeze on the Cuban economy. If the US is patient, we’ll give the economic stranglehold time to create regime change. If we are impatient, armed force will oust the Cuban regime. Either way, it is the end of Communism in the Western Hemisphere. (Except for the pesky and obnoxious DSA – Democratic Socialist of America … but I digress)

Prediction 4: The US will waive its “big stick,” and Colombia will back down.

Accuracy of prediction: 100%

Colombia tucked its tail when Venezuela fell. A major regional issue evaporated. The memory of there even being a “Colombia Problem” has already faded. It all became a non-issue.

History will likely not even record that Colombia threatened to provide armed support to Venezuela against the US. The Colombian government was wise enough to back down. Iran has a lot to learn from the Colombians.

The Trump administration has established that the Western Hemisphere falls within the US’s sphere of influence. A wave of right-wing political victories aligned with the US continues across South and Central America.

Prediction 5: The summit between Chinese President Xi and US President does not go well. Seeing the US commitments in Latin America and Iran, Xi begins a blockade of Taiwan, at least a year, if not 2 years, earlier than expected.

Accuracy of prediction: 50% (but I have 6 more months to see if the teht other 50% happens)

The Xi-Trump summit was nothing but showmanship and lacked substance. The two leaders essentially agreed to do nothing, and the few economic announcements made had already been negotiated independently.

Perhaps worse, with respect to Taiwan, other than Xi lecturing the US to stay out, China and the US maintain advisory positions.

There is a significant risk that China would begin operations against Taiwan. The US Navy remains tied up with Iran and the Strait of Hormuz, and the war has depleted roughly half of US long-range weapons and missile-defense interceptors critical to a conflict in the Pacific.

As I noted in my original prediction:

While it has not happened, if Xi had the guts … this fall offers the best opportunity to hit while America is occupied with Iran.

Turning from geopolitics, let’s look at my technology predictions so far...

Prediction 6: AI consolidates and experiences a correction, but not a crash.

Accuracy of prediction: 50% ( but there is more pain to come)

Later in this newsletter, we will provide an update on the new Chinese Kimi K3 model that caused a stir last week. The net result was a major correction, a 12.5% drop in the valuation of publicly traded infrastructure, chipset, and memory companies at the heart of the AI revolution.

Long-term AI will continue to be a revolutionary factor in the world economy. But a first wave of corrections and culling of poor investments or companies on dead-end paths is in order.

Prediction 6: Back to the Moon – another banner year for the Space Economy.

Accuracy of prediction: 100%

Ok, anyone could have made this prediction. I could not resist plugging all the planned activity in 2026

The 10-day Artemis II mission to fly a crew of four astronauts around the moon and return home was a complete success.

SpaceX not only went public; its valuation, $1.7 trillion, launched it into the top tier of the S&P 500

There is still more to come:

Astrobotic Technology’s Griffin-1 lander is targeting a launch in July.

China’s Chang’e-7 mission to the lunar south pole is aiming to launch in August.

Firefly’s Blue Ghost Mission 2 lander is aiming to fly before the end of this year.

Intuitive Machines’ IM-3 mission is also expected to launch this year.

Unfortunately, there was a disaster ...

A Blue Origin launcher blew up on the launch pad and will delay a number of NASA missions by 18 months. This scraps Blue Origin’s Blue Moon Mark 1 Pathfinder. A true shame

And that is a wrap for mid-year… So far the predictions are holding up

In other news

The AI competition heats up - China’s Moonshot AI Kimi K3 beats Claude Fable 5

As reported by Tom’s Hardware, China-based Moonshot AI’s latest release of its model Kimi K3 beat Claude Fable 5 and sits at the top of Arena.AI’s leaderboard based on Frontend Code evaluation. Arena.ai (formerly known as LMArena or Chatbot Arena) is a widely used, community-powered platform for crowdsourced AI model evaluation and benchmarking. Created by UC Berkeley researchers, it acts as the de facto scorecard for the AI industry by letting users prompt two anonymous models side-by-side and vote on which gives the better response. Moonshot said K3 still sits behind Anthropic's Claude Fable 5 and OpenAI's GPT 5.6 Sol on overall performance, but it outperformed every other model in the company's evaluation suite.

This begs the question: does K3 mark the end of US AI dominance and the AI bubble? The markets did not take the news well.

According to Yahoo Finance, the release of Kimi K3 caused the Philadelphia Semiconductor Index, which tracks America's biggest chipmakers, to fall 12.5% last week, marking its worst week in over 15 months. Nvidia, AMD, and Broadcom all fell sharply. China's own AI stocks fell too. In Hong Kong trading on Friday, Zhipu dropped 28%, and MiniMax lost 16%, per market data.

As I predicted at the start of the year, there will be consolidation and correction in the AI markets. That being said, the AI competition between China and the US is a marathon, not a sprint. AI models will continue to improve and, at this point, outperform humans. Today's AI performance winner will be tomorrow's ancient history. Anthropic and OpenAI are about to go public. Let’s see how well those public offerings perform before we talk about an AI Bust

China Aerospace Science and Technology Corporation captures its first rocket

The Wall Street Journal reports that on July 10^th, 11 years after SpaceX made history by recovering a Falcon 9 first-stage launcher, state-run China Aerospace Science and Technology Corporation successfully recovered a Long March 10B at sea. The Long March rocket was launched from the Hainan commercial spacecraft launch site in south China's Hainan Province. After the separation of the rocket's first and second stages, the first stage returned and was successfully captured on a seaborne platform via a net-capture system in the South China Sea.

To have any chance of a commercially economically viable space launch capability, a rocket company must feature two capabilities:

• The ability to successfully capture the first stage (and the future, possibly the2^nd stage)
• Refurbish and reuse the recovered rocket stage.

To understand the economics, let's look at the current (2026) launch costs of SpaceX’s Falcon 9. According to Space Stock, it costs $67M to manufacture a Falcon 9 launcher. Refurbishment of the launcher costs roughly 10% of the manufactured first-stage cost.

So recovery is an incredible first step, and hats off to China Aerospace Science and Technology Corporation. That entity joins SpaceX and Blue Origin as the 3^rd entity to successfully recover a first-stage launcher. The hard part is still ahead: engineering reusability and refurbishment of the first stage.

Speaking of reusability, on the very same day as the Long March recovery, as reported by Space.com, SpaceX broke its own record for the number of reuses of a Falcon 9 rocket. SpaceX mission B1071, a Starlink satellite refurbishment mission, marked the 35th reuse of a Falcon 9 first stage.

Every rocket launcher in the world is playing catch-up to SpaceX, and by the end of this year, the world's largest space launcher, SpaceX's Starship, will enter full-time service. There is a reason SpaceX is trading at $145, a $10 a share premium over its $135 launch price ( at the time I wrote this article).

Welcome to the new space race!

That’s a wrap for this week …

Dystopic- The Technology Behind Today's News

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