Noah Smith
· Noahpinion
· March 10, 2026 at 23:13
· ⏱ 15 min read
| Read on Substack ↗
Summary
Noah Smith argues that the Iran War, like the Battle of Khalkhin Gol before WWII, is a 'foothill' of a potential World War 3 — a localized conflict that hardens coalition lines, accelerates AI-driven warfare, and destabilizes global energy markets. For investors, this means heightened uncertainty around oil prices, a structural tailwind for defense AI and drone technologies, and a watchful eye on the Eastern theater (China/Taiwan) as the potential flashpoint that could trigger a global conflagration.
•The Iran War is domestically unpopular in the U.S. (53% oppose per Quinnipiac poll), limiting its duration and scope.
•Oil prices have spiked due to fears of Iranian disruption of Persian Gulf production via Strait of Hormuz or drone attacks.
•Russia is providing Iran with satellite imagery intelligence to target U.S. forces, mirroring U.S. support for Ukraine.
•Ukraine is sharing expertise in shooting down Shahed drones, gained from years of defending against Russian attacks.
•The U.S. and Israel's use of AI (including Anthropic's Claude) for targeting and battle damage assessment is a game-changer, reminiscent of tank warfare at Khalkhin Gol.
•China is prototyping AI for unmanned combat and cyberattacks, but the U.S.'s demonstrated ability to decapitate leadership serves as a deterrent.
•The article compares a potential Chinese attack on Taiwan to Hitler's invasion of Poland — an unambiguous start of a wider war.
•Coalitions are solidifying: U.S., Ukraine, Israel, and Europe on one side; Russia and Iran on the other, with China and India remaining neutral but watchful.