Warfare is undergoing a fundamental shift where tech with big price tags is being challenged by a more agile, decentralized model, spearheaded by Silicon Valley-backed start-ups, industry watchers told CNBC.

The traditional defense model — notorious for development cycles that can span decades — is coming under increasing pressure. Companies are instead betting on a new type of warfare, based on shorter lead times that allow for rapid deployments and more cost-effective solutions.

Previously, warfare was about expensive platforms and precision strikes, driving a downsizing in military forces as countries increasingly relied on cutting-edge technology, said Blythe Crawford, former commandant of the RAF’s Air and Space Warfare Centre.

“That all changed, I would argue, when the first $500 drone took out a $5 million tank on the battlefield in Ukraine,” Crawford told CNBC’s “Squawk Box Europe.”

The company Ark Robotics, develops autonomous robots for rapid deployment using feedback from the battlefield to shape the technology. The CEO, who goes by the pseudonym Achi for security reasons, told CNBC that the war in Ukraine shows a paradigm shift in warfare, part of a bigger change also seen in the Iran war. 

“[It’s] a totally new approach, how you handle the military conflict… the game [has] changed into the mass, affordable systems that are to be orchestrated with AI,” the CEO told CNBC’s Ritika Gupta.

The urgency for this shift is driven by a sobering economic reality. 

“History tells us that the last 400 wars were won on economics,” said Andy Baynes, co-founder of Tiberius Aerospace. “If we continue to fire $4 million Patriot systems at $20,000 Shahed drones, we’re going to lose.”

Crawford also noted that while high-end products like the Eurofighter Typhoon remain vital, they now require a “low-cost wrapper” to survive. He pointed to the U.K.’s Storm Shadow missiles, which saw dramatically increased success rates in Ukraine only after being complemented by swarms of cheap drones and electronic warfare to overwhelm Russian defenses.

“It’s what we refer to as a high-low mix,” Crawford said. “The character of war has changed when a $500 drone can take out a $5 million tank.”

Tiberius Aerospace is one company betting on the need for low-cost, scalable warfare equipment. The two-year-old company, founded by Silicon Valley entrepreneurs, focuses on design and development of weapons and licenses designs out to domestic manufacturers.

It’s introducing a new way to speedily segregate design and development from manufacturing, through its GRAIL platform. 

The company announced Thursday that Ukrainian defense technology IP will be available for license and manufacturing in the U.K. through the AI-powered platform, which it positions as a defense-as-a-service model. 

“It’s going to show that separating design from manufacturing is commercially viable. It’s a way to reduce defense budgets or dependency on exquisite, high-cost systems and move into high-impact, cost-effective systems in the future,” Baynes told CNBC.  

“That’s a key difference to how defense primes operate today, where they have monolithic systems where they’re doing both design and manufacturing under one roof, similar to how my former sector in the electronics industry were doing it in the 1990s,” he told CNBC’s “Squawk Box Europe.”

Beyond efficiency, there is also a strategic play for European autonomy. As rhetoric regarding the future of NATO and U.S. commitment fluctuates, the ability to manufacture sovereign, low-cost munitions could provide a safety net for the region’s governments. 

JPMorgan Chase CEO Jamie Dimon is calling for a broad recommitment to American ideals as his bank navigates geopolitical uncertainty, a teetering economy and the revolutionary impact of artificial intelligence.

Dimon in his annual letter to shareholders, published Monday, noted the country’s 250th anniversary as “the perfect time to rededicate ourselves to the values that made this great nation of ours — freedom, liberty and opportunity.”

“The challenges we all face are significant. The list is long but at the top are the terrible ongoing war and violence in Ukraine, the current war in Iran and the broader hostilities in the Middle East, terrorist activity and growing geopolitical tensions, importantly with China,” Dimon said. “Even in troubled times, we have confidence that America do what it has always done — look to the values that have defined our singular nation and sustained our leadership of the free world.”

Dimon, the longtime leader of the world’s largest bank by market cap, is among the most outspoken of U.S. corporate leaders. His annual letter offers not only a matter of record for his firm’s performance, but also sweeping perspectives on the global state of affairs.

In Monday’s letter, Dimon noted headwinds including global conflicts, persistent inflation, private market upheaval and what he called “poor bank regulations.”

Dimon said that while regulations like those put in place after the 2008 financial crisis “accomplished some good things … they also created a fragmented, slow-moving system with expensive, overlapping and excessive rules and regulations — some of which made the financial system weaker and reduced productive lending.”

He specifically cited negative consequences of capital and liquidity requirements, the current construction of the Federal Reserve’s stress test and a “badly handled” process at the Federal Deposit Insurance Corporation.

Dimon also said JPMorgan’s reaction to revised proposals for Basel 3 Endgame and a global systemically important bank (GSIB) surcharge — issued by U.S. regulators last month — were “mixed.”

“While it was good to see that the recent proposals for the Basel 3 Endgame (B3E) and GSIB attempted to reduce the increase in required capital from the 2023 proposals, there are still some aspects that are frankly nonsensical,” Dimon said.

The CEO said the aggregate proposed surcharges of about 5%, the bank would need to hold “as much as 50% more capital across the vast majority of loans to U.S. consumers and businesses when compared with a large non-GSIB bank for the same set of loans.”

“Frankly, it’s not right, and it’s un-American,” he said.

Dimon identified geopolitical tensions as the primary risk facing his bank, namely the wars in Ukraine and Iran and their impacts on commodities and global markets — deeming war “the realm of uncertainty.”

“The outcome of current geopolitical events may very well be the defining factor in how the future global economic order unfolds,” he said. “Then again, it may not.”

He also cited a “realignment of economic relations in the world” brought on by U.S. trade policy. U.S. President Donald Trump has made tariffs a signature policy of his second term in office, introducing higher duties on dozens of trade partners and import categories.

Dimon also spoke to recent upheaval in the private markets, as fears around loans made to software firms spur massive redemption requests at private credit funds.

JPMorgan has been at the forefront of Wall Street firms introducing AI at every level of its business. Last year, JPMorgan Chief Analytics Officer Derek Waldron gave CNBC an early demonstration into how it’s using agentic AI to speed up work and improve results for customers and shareholders.

Farmers in the northern hemisphere are heading into the crucial spring months, during which major fieldwork must begin. Their peers in the south, meanwhile, are busy harvesting crops before the winter sets in.

However, their work now takes place as the Iran war creates serious supply constraints for essential fertilizer products — fueling massive price spikes and warnings of looming food insecurity.

Around one-third of the global seaborne fertilizer trade passes through the Strait of Hormuz, according to the UN.

The waterway, a critical shipping route that runs along Iran’s southern border, has been severely disrupted since the start of the war, with traffic effectively coming to a halt and several ships being hit by projectiles in or near the waterway.

Since the U.S. and Israel launched strikes on Iran on Feb. 28, the price of fertilizer — much of which is produced in the Middle East — has skyrocketed.

Fertilizer futures contracts are less liquid than other commodities, making prices more opaque. But analysts working in the sector told CNBC that they had seen the cost of FOB granular urea in Egypt — a bellwether of nitrogen fertilizers — jump to around $700 per metric ton, up from $400 to $490 before the war began.

In a Monday note, Oxford Economics’ Alpine Macro said urea and ammonia prices had surged by around 50% and 20%, respectively, since the war began. Other fertilizers, like potash and sulfur, have also risen in price.

The Middle East is a particularly large exporter of urea and nitrogen products, according to Chris Lawson, VP of market intelligence and prices at CRU.

“With the Strait of Hormuz essentially cut off, there’s a big chunk of global trade that isn’t able to move right now,” Lawson said. “We estimate around 30% of exportable suppliers are not really available to the market right now, that is Saudi Arabia, Qatar and Bahrain, but that also includes Iran.”

Iran, Lawson said, is an important producer of nitrogen-based fertilizers and one of the largest exporters globally.

“There’s a lot of traded supply that is at risk — 30% of global urea trade comes out of Iran and the Hormuz-constrained countries,” he told CNBC.

“It’s a long supply chain — if farmers aren’t able to get the urea that they need, crop yields will inevitably go lower. Nitrogen is the main nutrient that a crop needs to grow, [and] there will be inventories that can be drawn down, so you’re not really going to see an impact on crop yields and a loss of crop production until later in the year.”

Dawid Heyl, a co-portfolio manager for the Global Natural Resources strategy at Ninety One, told CNBC that nitrogen fertilizers like urea were at the forefront of the Middle East crisis because — unlike other fertilizer groups like potash and phosphates — nitrogen is “the one element that you need to get to the plant every single year.”

“You can skip a season of potash, you can skip a season of phosphates, but you can’t skip a season of nitrogen,” Heyl said.

With farmers in the northern hemisphere due to begin fertilizing their fields, the supply constraint has intersected with cyclical demand. Urea, one of the world’s most used fertilizers, is used in the growth of various crops, including maize, wheat, rapeseed and some fruits and vegetables.

“There’s a direct correlation to your nitrogen application and your agricultural yield in the end,” Heyl said. “That’s why I’m a lot more concerned about the current crisis than I was when Russia-Ukraine happened four years ago.”

When Moscow launched its full-scale invasion of Ukraine in early 2022, the two countries were major exporters of fertilizers, with Russia accounting for a significant proportion of global potash production. Sanctions on Russian exports added pressure to a market that was already experiencing shortages, pushing prices higher.

Meanwhile, China — another large exporter of fertilizers — has put restrictions on exports to protect its domestic market from shortages, news agency Reuters reported last week.

Ninety One’s Heyl said that markets had entered 2026 with fairly high stocks of basic food commodities that were reliant on fertilizer deliveries, meaning there were “buffer stocks” that might help offset some shortages of corn, wheat, soybeans and rice.

“If agricultural yields were [hypothetically] impacted by 5% this year, I don’t think we’ll be looking at starvation, but it would certainly cause food inflation,” he told CNBC, noting that emerging-market countries were more likely to feel the brunt of the impact.

“Unfortunately, the poorer countries in the world are quite often more exposed to these crises,” Heyl said. “I think some of the African nations that import a lot of grains, for instance, are going to be impacted.”

India, which imports nitrogen fertilizers as well as natural gas to produce them domestically, also faces high exposure to the shortages, Heyl added.

“I’m more concerned for [a country] like India, for regions like East Africa, which are going to be more vulnerable,” he said. “Emerging markets east of Suez and the global south are quite often the sort of last to be able to afford [inflated prices].”

But he noted that the U.S. was not completely insulated from the implications of a fertilizer price shock, noting that while America produces a lot of its own nitrogen fertilizer, the country “has not got self-sufficiency.”

According to the U.S. Fertilizer Institute, around a third of nitrogen, phosphate and potash fertilizers used in the United States are imported.

“It’s going to be inflationary for the farmer,” Heyl said of rising fertilizer prices trickling through to the United States. “Are there going to be certain regions that can’t get their hand on the fertilizer or have to ration?”

A total of 54 agricultural groups recently wrote to U.S. President Donald Trump to call for “much-needed market relief for America’s farmers” amid surging fuel and fertilizer prices.

“As planting season began in earnest across much of the U.S., the closure of the Strait of Hormuz sent fuel and fertilizer prices skyrocketing,” they said. “Maritime freight disruptions from the ongoing conflict in Iran pose significant consequences to food security here at home and around the world.”

The U.S.-Israeli war on Iran is a “misadventure” whose goals and exit strategy remain unclear, Russia’s ambassador to the U.K. told CNBC.

Andrey Kelin said Russia has “a lot of sympathy” with Tehran and said “the best end” to the escalating Middle East war is for it to “show only that they are senseless.”

“We still are trying to understand, what are the goals of President Trump in this campaign. You know that lots of doubts have been expressed about the exit strategy that the American administration can have in this endeavour,” Kelin told CNBC’s Steve Sedgwick in an interview recorded on Thursday.

Russian President Vladimir Putin sent a message to Iran’s new supreme leader, Mojtaba Khamenei, earlier this week, offering his “unwavering support” to Tehran and saying the country “has been and will remain the Islamic Republic’s reliable partner.”

The war has been raging for two weeks, with heavy strikes reported across Iran’s capital city and shipping traffic through the strategically vital Strait of Hormuz severely disrupted.

The White House has said the objectives of Operation Epic Fury have been to destroy Iran’s ballistic missile arsenal and production capacity and its navy, sever its support for proxies in other countries and ensure Iran can never acquire a nuclear weapon.

The White House said on Thursday these objectives “have remained unchanged unambiguous, and consistent” since the operation began on Feb. 28.

“We have a lot of sympathy with Iran. We have a lot of sympathy as well with the Persian Gulf states, there is no doubt at all. As for the beginning, I cannot understand the position of when everybody is blaming Iran,” Kelin said.

“[The] crisis has started with the, as I have said, with Israel and U.S. aggression against Iran and it was in the middle of talks, of course,” he continued, referring to negotiations over Iran’s nuclear program held in the Swiss city of Geneva last month.

“My president discussed this issue with the president of the United States, and we can make a good contribution by the way to finish it, to wrap it up.”

CNBC has contacted a spokesperson at the White House and Israel’s Foreign Ministry and is awaiting a response.

Alongside China, which has received millions of barrels of oil through the Strait of Hormuz even as war chokes the waterway, Russia stands as one of Iran’s most influential diplomatic partners.

U.K. Defense Secretary John Healy told reporters on Thursday that Putin’s “hidden hand” appears to be behind Iran’s military playbook as well as potentially some of Tehran’s military capabilities.

Iran has reportedly fired off more than 2,000 Shahed drones across the Middle East since the war began. These drones, which were first designed in Iran, have been used extensively during Russia’s invasion of Ukraine.

Ukrainian President Volodymyr Zelenskyy said earlier this week that the Kremlin’s own assessments estimate that more than 1.3 million Russian soldiers have been killed and wounded on the battlefield since Russia launched its full-scale invasion of Ukraine in February 2022. CNBC could not independently verify this report.

A report from the Center for Strategic and International Studies published in January said Russian battlefield casualties are significantly greater than Ukrainian fatalities, with Ukrainian forces likely suffering somewhere between 500,000 and 600,000 casualties.

Kelin said he was sure that both Moscow and Kyiv would eventually agree to a diplomatic resolution to the war.

“I cannot say when it is going to happen, but a diplomatic solution is badly needed,” Kelin said.

Kelin said The U.S. was “playing a constructive role in this diplomatic effort,” but added: “Since Ukraine is not prepared at the moment and since Europe still prefer to back up Ukraine as much as possible, to supply it with weapons, with money … making no efforts to solicit or to help this diplomatic solution, this will last for some time.”

U.S-brokered talks on the Ukraine war have been put on hold due to the Iran conflict, with U.S. Special Envoy Steve Witkoff telling CNBC on Tuesday that the discussions would now likely take place next week. Ukraine’s Zelenskyy had urged the U.S. not to remove sanctions on Russia ahead of those talks, although the White House has since moved to temporarily lift sanctions on Russian crude at sea.

The European Union’s foreign policy chief, Kaja Kallas, recently said there appears to be “no end in sight” to Russia’s full-scale invasion of Ukraine.

Speaking at a news conference on Monday, she said it is clear Russia’s army was “bogged down” and its economy is in steep decline.

“Russia’s maximalist demands cannot be met with a minimalist response,” Kallas said. “It’s just common sense, if Ukraine’s military is to be limited in size, Russia’s should be too.”