Private Sector Hackers: The New Frontier of US Cyber Statecraft

Risk Outlook: August 25, 2026

Aug 25, 2026

Welcome to the Stepwise Risk Outlook, which highlights and contextualizes over-the-horizon developments in key regions of the world and industries of the global market. Today’s featured deep dive by Samuel Bloebaum examines the Trump administration's new anti-cybercrime program.

Private Sector Hackers: The New Frontier of US Cyber Statecraft

By Samuel Bloebaum

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The Trump administration’s announced program to coordinate private sector anti-cybercrime operations creates new opportunities for US offensive cyber statecraft. It represents a more aggressive approach to US cyber policy and could usher in a new industry of offensive cyber contractors, attracting both established technology companies and start-ups. However, the program could also expose participating companies to unforeseen liabilities and heightened cyberattack risks. If not carefully calibrated and monitored, offensive cyber operations targeting foreign criminal organizations could escalate cyber campaigns conducted by US adversaries in coordination with cybercriminals. These foreign cyber-attacks could affect companies participating in the coordination program and private sector bystanders, raising the general cyber risk environment for US companies. Non-US companies also risk being mis-targeted in private sector cyber operations if the coordination program fails to enforce stringent operational review and approval guidelines.

In today’s full analysis:

Functioning of the Coordination Program
Target Choice Risks Escalating Hybrid Warfare
Businesses Caught in the Cyber Crossfire

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Global

UN Secretary-General António Guterres is warning that a more multi-polar order risked sliding into confrontation unless global institutions adapted to it. In an interview with the Financial Times, Guterres, who is approaching the end of his 10-year stint at the head of the UN, observed that the stalemates in the Russia-Ukraine war and the US-Iran war expose the limits of superpowers’ abilities to impose their will by force.

The global order has shifted during Guterres’ tenure at the UN, creating forces of disorder. The transition from a unipolar world and a Western consensus backing a set of international norms to diffused global powers pursuing divergent interests, UN influence and the power of global consensus building has weakened. With a resurgent Russia as a military force, China as a global economic force and middle powers no longer willing to follow in the wake of superpowers, the UN and multilateral institutions have become less effective instruments. With global fragmentation, minilateralism or coalitions of the willing have emerged as the preferred vehicle for managing regional tensions. The UN has lost relevancy in this new geopolitical period, with the UNSC paralyzed and deep disagreements over priorities of peace and security, climate change and human development.

Europe

Some European countries have renewed their call for a windfall tax on oil companies. The finance ministers of Germany, Spain, Portugal, Italy, Poland and Austria have co-written a letter asking Ireland, which currently holds the EU’s presidency, to set a discussion of a windfall tax for the EU’s next meeting of finance ministers. The six ministers hope to push forward an EU-wide framework for taxing excess energy profits. The ministers also proposed that the potential plan build off of lessons learned from the 2022 energy crisis.

Five of the six countries issued a similar call earlier this year. In April, the ministers in the governments of Austria, Germany, Italy, Portugal and Spain issued a letter asking the EU Climate, Net Zero and Clean Growth Commissioner to work out an EU-wide scheme for taxing windfall profits.

A windfall tax scheme will potentially face obstacles even inside the countries that signed the letters. Although Lars Klingbeil, Finance Minister of Germany, signed on to both letters promoting a windfall tax, the concept faced serious pushback from within his own government. Katharina Reiche, Germany’s Economics Minister, sharply criticized the proposal when it was first floated in April.

Read More: Reuters [paywall], Politico EU, Zeit [in German]

Middle East

Iran still has options to escalate further in response to America’s “Operation Economic Outcast.” New US sanctions – or, more accurately, the threat of secondary sanctions on its trade partners – are being framed in the US as powerful new leverage against Iran. Even if true, the Islamic Republic has significant options left to escalate the conflict and increase costs on the US in turn, transforming Economic Outcast into the next step of an escalatory ladder rather than a decisive “economic D-Day,” as the US has framed it.

The ultimate Iranian goal is to demonstrate to Washington, and the broader international community, that maintaining pressure on Iran carries a growing economic cost. Iran could do this many ways: broadened targeting of maritime shipping via vessel targeting or further destruction of loading infrastructure, pushing the Houthis to escalate in the Red Sea, targeting US or allied warships, attacks on undersea infrastructure, or cyberattacks further afield. These steps risk transforming Gulf and other capitals from observers into participants. But Iran’s calculus that Washington is more susceptible to global economic pain than Tehran remains intact.

Read More: Reuters [paywall], Danny Citrinowicz, New York Times [paywall]

Asia-Pacific

Chinese President Xi Jinping is expected to travel to New Delhi next month to attend the 18th BRICS Summit, marking his first visit to the country in seven years and reinforcing signals that Asia’s two largest economies are ready to rebuild ties. Relations deteriorated sharply after the deadly 2020 Galwan Valley clash along their disputed border, freezing high-level engagement and broader bilateral ties. Since Prime Minister Narendra Modi and Xi met in Kazan in October 2024, the two sides have gradually recalibrated relations through senior-level engagement, resumed direct flights and border trade, and border talks. National Security Advisor Ajit Doval arrived in Beijing today for the 25th round of border talks, though his visit takes place against a backdrop of recent border flares, including reports of Chinese troop incursions.

The diplomatic thaw is spilling into economic ties, though New Delhi appears intent on selectively reopening to China while maintaining safeguards. India’s partial easing in May of restrictions on FDI from countries sharing a land border (introduced after the Galwan incident) now allows investments with up to 10% Chinese ownership to enter through the automatic route within applicable sectoral caps. Since May, more than $500 million in investment linked to the revised rules has entered the country. India has also increasingly allowed Chinese firms to provide technology and manufacturing expertise through partnerships that preserve Indian ownership and control. The emerging pattern is a controlled normalization that balances India’s economic interests with security concerns, a framework that could expand during Xi’s visit.

Read More: Reuters [paywall], The Hindu, Economic Times, Al Jazeera, Channel News Asia, East Asia Forum

Americas

Ruben Rocha Moya, the governor of Mexico’s Sinaloa state, stepped down on Saturday after returning to office just a day earlier. Rocha had returned to office on Friday, after initially stepping down in April when the US Department of Justice unsealed an indictment accusing Rocha of conspiring with cartels. Nine other sitting or former Mexican officials were also indicted along with Rocha, amid rising US-Mexico tensions. The accusations against Rocha alleged that he collaborated with the Sinaloa cartel to traffic drugs to the US, accepting bribes in exchange for protecting the cartel operations. Rocha is part of the ruling Morena party, and has denied wrongdoing, calling himself a victim of political persecution.

As Mexican President Claudia Sheinbaum seeks to unify her Morena party, Rocha has lost the party’s support. Sheinbaum has rallied her party amid strained ties with the Trump administration, which recently revoked the visa of the son of former president and Morena founder Andres Manuel Lopez Obrador. Rocha has been under active investigation, and members of his own party openly criticized his return to office, calling the move inappropriate, with some calling for him to step down again. Rocha succumbed to this pressure over the weekend. The investigation into his involvement with cartels is ongoing.

Read More: New York Times [paywall], Reuters [paywall], CBS

Africa

US envoy Massad Boulos proposed expanding an existing UN arms embargo for Darfur to cover all of Sudan. The UN embargo over the Darfur region was imposed in 2004 in response to ongoing human rights abuses perpetrated by militia groups. Previous efforts by the US to broker a peace agreement between the Sudanese Armed Forces (SAF) and the Rapid Support Forces (RSF) have been unsuccessful, with both factions—backed by external actors—continuing to calculate that they can outlast the other and achieve their objectives militarily.

Although the UN Security Council is unlikely to approve an expansion of the embargo, the proposal signals a growing willingness by the Trump administration to increase pressure on both parties and their external backers. Russia has opposed the proposal, arguing that an embargo could weaken the capabilities of the SAF, which Moscow has supported. Given Russian opposition, a nationwide UN arms embargo is unlikely to be implemented. Washington could instead pursue unilateral measures, including expanding its sanctions regime to target external actors deemed to be providing military or financial support to either the SAF or RSF.

Read More: DW, Stepwise Risk Outlook

Geoeconomics

Treasury Secretary Scott Bessent announced Operation Economic Outcast, describing it as an “economic D-Day” intended to sever every remaining financial connection sustaining Iran. Treasury designated digital assets, technology, gold, aviation and shipping as sanctionable sectors under an existing executive order, supplementing earlier restrictions on Iran’s financial, petroleum and petrochemical industries. The determinations allow the US to sanction foreign actors operating in or supporting these sectors, although they do not automatically block every participant. OFAC simultaneously sanctioned nearly 60 entities, individuals and vessels connected to Iranian weapons procurement, cyber operations and oil-revenue networks. Washington is also privately giving governments deadlines to close identified Iranian activity, warning that entities could lose access to the US financial system if they fail to comply. Bessent said Washington was giving countries time to unwind their Iran-related trade before imposing secondary sanctions and declined to identify which countries face deadlines because, “Why would I want to blow up the global financial system?”

The operation mostly omitted Iran’s largest trading partner: China. The first round avoided targeting Chinese financial institutions suspected of facilitating Iranian oil transactions, even though China remains Iran’s largest oil customer. Sanctioning major Chinese banks could provoke retaliation ahead of the Trump-Xi summit, particularly through critical-mineral controls; avoiding them, however, weakens Washington’s promise of “zero leakage.”

Read More: US Treasury, Reuters [paywall], The Wall Street Journal [paywall], ABC News, The Washington Institute

Disruptive Technology

Nvidia’s growing role as a financier of the AI boom is raising concerns about its financial exposure from circular deals if demand weakens. CEO Jensen Huang has defended the strategy as a means to deploy its substantial cash reserves to support rapidly growing AI customers that remain unprofitable, arguing such financing helps secure the data centers, power supplies and other infrastructure needed to sustain demand for Nvidia’s chips. However, it increases Nvidia’s risk of overextension within the AI ecosystem and could artificially inflate demand signals.

Meanwhile, Nvidia is also increasingly moving beyond its core chipmaking business to invest directly in AI development, further concentrating its exposure to the sector. The company is planning a $6 billion investment in AI startup Poolside to develop a major open-weight model that could compete with Chinese models such as DeepSeek and Kimi K3. While the strategy could boost Nvidia’s portfolio across the AI stack, it also risks leaving the company increasingly dependent on continued growth in AI demand.

Read More: Reuters [paywall], Wall Street Journal [paywall], Wall Street Journal [paywall]

Transnational Crime and Corruption

The US military announced its first drug trafficking boat strike in two months, killing two alleged traffickers in the Eastern Pacific. The strike was carried out under the new Joint Task Force Western Hemisphere, established earlier in August to coordinate military activities between the US and the 18-member Americas Counter Cartel Coalition. Southern Command Commander Francis Donovan celebrated the strike as part of a campaign to disrupt, dismantle and eliminate “cartel terror” in the Western Hemisphere.

The two-month pause in boat strikes is partially attributable to US military relief efforts in South America. US Southern Command forces were deployed in Colombia and Venezuela to provide aid following earthquakes in both countries.

Read More: US Southern Command, New York Times [paywall]

Defense

The US government is going to conduct testing for new directed energy capabilities. Joint Interagency Task Force 401 (JIATF-401), the Department of War-led initiative to align counter-drone activities, will conduct live fire testing of directed energy weapons later this year and could purchase capabilities on the spot if they perform well. This is part of a pilot program run by JIATF-401. The program was announced in May and selected five different military facilities to experiment with directed energy technology for counter-drone missions. Currently, officials are particularly focused on lasers and high-powered microwaves.

The Pentagon set up JIATF-401 last year to coordinate the government’s counter-drone efforts. JIATF-401 brings together representatives from across the federal government, including the FBI, Department of Homeland Security, Federal Aviation Administration and numerous other stakeholders. Task Force leaders gathered with representatives of stakeholder organizations last week for the second Interagency Summit.

Countering unmanned systems has been one of the most important trends in defense technology over the last several years. The ubiquity of different types of unmanned systems in the Middle East and in Ukraine has created an imperative to develop solutions that can successfully scale at an acceptable cost.