TheChek News Flow

Forget all that chatter about AI killing us all. We’re back to looking at what really matters—the revenue! Oracle demonstrated on Thursday that demand for AI computing capacity remains pretty darn robust. Larry Ellison’s software and cloud firm reported 30% top-line growth for the quarter ending Aug. 31, a tad better than the company projected in June, sending its battered stock up 4.4% in after-hours trading.

The quarterly update demonstrated how much Oracle is benefiting from customers so desperate for capacity that they're paying up-front—what the company calls prepayments—for computing rental deals. Oracle brought in $11.4 billion in such customer prepayments in the quarter, doubling the amount of cash its operations generated. These payments help Oracle finance data center construction without dipping as much into its own pocket. While it spent $28.5 billion on capital expenditures in the August quarter, Oracle only burned $5 billion of its own money.

And prepayments aren’t the only way the company is keeping a lid on its own cash outlays. Some customers have bought their own AI chips and are bringing them to its data centers. Oracle is striking more such deals. Its executives said on Thursday night that most of an additional $30 billion of AI computing deals struck in the quarter involved customers prepaying or doing BYO AI chip deals.

(One of Oracle's big customers, OpenAI, demonstrated its urgent need for more computing capacity on Thursday when it suspended new sales of its $200 a month Pro subscription because it was having trouble meeting demand for its new Astra AI models.)

Both prepayments and BYO hardware deals are smart ways for Oracle to keep down its financing costs, although Oracle presumably doesn’t earn as much from them as it would for traditional rental arrangements. Still, that may not be a huge deal: Oracle co-CEO Clay Magouyrk said on Thursday that Nvidia chip rental deals renewed in the quarter had a 20% premium to previous contracts. That revelation echoed comments from other cloud executives about chip rental prices soaring, another sign of intense demand. (Having to make prepayments isn’t great for startups, as we showed here.)

Oracle stock has been crushed over the past year—it's down 53%—due to anxieties about the amount of debt it has to take on to fund its ambitious AI expansion plan. In July, S&P downgraded Oracle’s credit rating, citing its reliance on OpenAI as a customer and its hefty capex projections for this year. Oracle is also facing delays in some high-profile data center projects. (On that score, Magouyrk said on Thursday’s call that “all our eggs are not in a single basket,” meaning it has many other data center sites to lean on.)

Despite all those worries, Oracle is delivering, so far at least. Will investors begin to give the company the benefit of the doubt?

The Wall Street giant thinks it can offer a giant supply of capital that Silicon Valley simply won’t find elsewhere. It’s increasingly putting that money to creative use.

In May, Blackstone unveiled a new joint venture with Google that revolved around a big number: The Wall Street giant was promising to spend $5 billion to buy 500 megawatts’ worth of Google’s tensor processing units, and it said it would use the chips in a new company that would deliver computing power to leading AI firms.

Four months later, Blackstone’s plans have only gotten larger, according to a person with knowledge of the effort. Blackstone actually anticipates buying many more TPUs—several “multiples” beyond the originally announced figure, the person said.

In other words, Blackstone is likely to commit tens of billions of dollars to securing multiple gigawatts of AI chips. Blackstone declined to comment on exactly how many more TPUs it’ll buy.

Jas Khaira, the leader of a Blackstone team dubbed N1 that is leading the company’s push into AI investments, said in an interview that the firm’s “biggest conviction bet continues to be compute.” The company, he said, views the infrastructure build-out as something that will be bigger than a simple technology cycle. “This is definitely more akin to an industrial revolution,” he said.

Formed in 1985 by two Lehman Brothers bankers to do leveraged buyouts, Blackstone in recent decades has expanded into real estate, credit and insurance. Even before the AI boom, it was already the world’s largest private equity firm. It currently controls $1.3 trillion in assets under management.

Blackstone now has its sights set on becoming the largest AI financier in the world. It controls $275 billion in digital infrastructure assets—a figure that seems likely to swell in the immediate future—and has announced a dizzying array of new ventures and investments this year.

The TPU purchases form just one such splashy deal. Blackstone has also said it would join Goldman Sachs and four other firms to finance $500 billion of Nvidia’s graphics processing units. In addition, it is partnering with Broadcom and Anthropic on a deal separate from the Google joint venture to finance TPUs Anthropic will lease. And Blackstone raised $2 billion in a publicly traded vehicle to buy data centers. That’s all on top of the equity stakes it owns in Anthropic and OpenAI—and the loans it has made to companies such as Firmus Technologies and Aligned Data Centers that are poised to benefit from the AI boom.

This year Blackstone also formed a consulting firm with Anthropic that will deploy a Palantir-like strategy of sending teams of engineers to help businesses better use the AI lab’s agentic coding technology.

With the Google joint venture, Blackstone is demonstrating another bit of evolution, showing a desire to take on the kind of dealmaking that was long the redoubt of Silicon Valley: forming and incubating startups, and coupling that with the long-term capital commitments usually reserved for big infrastructure projects.

Blackstone figures it can become a dominant player in the AI race because its giant supply of capital far exceeds what tech companies can get from their traditional source of funding: venture capital. And the AI era has greatly magnified Silicon Valley’s demand for money as the industry wrestles with affording the enormous sums needed to buy semiconductors and build data centers.

“Venture has such control over the narrative of tech, but they are losing it because [AI] is so much bigger than what they can deal with,” said one person who has worked in both Silicon Valley and Wall Street.

Blackstone isn’t alone among the investment firms spending big on AI. The other big private equity pioneers have gotten in on the action, too: KKR, for instance, raised $10 billion earlier this year to build a data center company, while Apollo recently partnered with Blackstone on the Broadcom deal, which involved funding $35 billion in chips. Meanwhile, Blue Owl, a relative newcomer on Wall Street, also plans to raise $6.5 billion for a publicly traded fund that will own data centers. To muscle out its rivals, Blackstone believes it can simply put in more capital than they can, offering financing to an AI company across its lifespan—no matter what its capital needs.

Blackstone’s wager on AI obviously isn’t without risk: It is committing tens of billions of dollars to a technology that is still in the most nascent stages of commercialization. It has faced trouble from large bets it made in the past—particularly on hotels and commercial real estate.

And skeptics, including at least one former senior executive, say the firm’s incentives are more aligned with raising money—from large institutional investors and everyday investors alike—than generating top returns. The more money Blackstone raises, the more it can collect from simply managing those assets regardless of anything else. The fees it collects managing assets or advising the companies in its portfolio have climbed to more than $8 billion in annual revenue, up from $4.1 billion five years ago. They accounted for over half of all firmwide annual revenue since 2021, when Blackstone set a record on the back of massive investment returns.

A Blackstone spokesperson disputed the notion that the firm is only focused on raising money. “This is categorically false. We are always completely focused on delivering strong returns for our investors,” said the spokesperson.

Nonetheless, telling investors you have bet big on an industry that will do everything from replace entire industries to cure cancer can be a good marketing strategy. Beginning in 2022, when Blackstone faced withdrawal requests from investors in one of its flagship real estate funds, it highlighted its AI investments in the fund in an effort to slow the pace of withdrawals.

The responsibility for navigating the AI landscape falls on Khaira, a longtime Blackstone executive with a history of involvement in some of the firm’s most defining investments.

Khaira, who was an Eagle Scout as a teenager and studied business and history at the University of California, Berkeley, joined Blackstone in 2004. Four years later, he helped with its $930 million purchase of GSO Capital Partners. The firm would become the foundation of the credit and insurance unit that was actively involved in the Broadcom chip deal, among other AI-related loans. In 2015, Khaira was involved with Blackstone’s first data center investment—a facility for Microsoft—and he led the firm’s first investment in CoreWeave in 2023.

At N1, a newly created team to explore and probe where Blackstone can next make its mark in AI, Khaira will act as the firm’s point man in Silicon Valley, and he has called Blackstone “the Switzerland” of AI financing for its role in helping archrivals in equal measure, according to a person who has heard him use the term. He will also have to get a growth equity team back on track after a series of lackluster consumer internet bets. In recent months, he has taken an active role in hiring for the Google joint venture.

Benjamin Treynor Sloss, who previously spent more than two decades at Google, is running the joint venture, which aims to provide a one-stop shop for computing needs, pulling together everything from power access to networking equipment and software. On Wednesday, Blackstone and Google unveiled its official name: Crux AI.

The venture recently poached Jessica Fischer, chief financial officer of Charter Communications, and it has hired chief operating and chief development officers. It’s close to hiring a chief technology officer as well.

As Khaira tries to ensure no potential AI play goes unnoticed, he is part of a group that convenes every two weeks at the company’s 345 Park Avenue headquarters to discuss AI investments. CEO Stephen Schwarzman is often there, and so is Jon Gray, the firm’s president, according to one person with direct knowledge of the meetings.

According to Khaira, Blackstone is gleaning insights about AI by studying how the companies within its traditional private equity business use the technology—what applications they buy, for instance, and their thinking about open-source models.

Blackstone also bought data center developer and operator QTS for $10 billion in 2021, during the pandemic.

Blackstone initially premised its bet on QTS on the continued growth in cloud computing. The purchase put Blackstone in an ideal—and lucky—position when OpenAI introduced ChatGPT in November 2022, igniting a huge rush for the computing power QTS could offer.

Blackstone is now the largest owner of data centers in the world outside the large tech companies, according to the firm, and in April, Schwarzman said its data center portfolio had grown to $150 billion. Another $160 billion is in various stages of development.

Other bets have yet to pay off. The firm sold $2 billion of shares in May in Blackstone Digital Infrastructure Trust, with an intention to use the money to buy data centers. Blackstone hasn’t made any acquisitions even as competitors like KKR and Blue Owl have been unveiling their own plans, though its executives have said they are in talks to buy their first assets.

Blackstone isn’t afraid to go the pioneering route. Its IPO was one of the first in the private equity industry, which had long eschewed the public markets. Its QTS investment made it look smart. And in 2023, it helped create the first loan backed by AI chips.

The investment was part of a $2.3 billion financing for data center developer CoreWeave, which had signed a lease with Microsoft. Before Blackstone advanced the money, a team of executives from its tactical opportunities team, including Khaira, flew out to the Santa Clara, Calif., headquarters of Nvidia, whose chips go into CoreWeave facilities, according to a person with direct knowledge of the diligence. Over several weeks, the team studied GPUs and other parts of the business.

Then as now, a big question was whether the chips would have a useful life once the initial Microsoft lease ended. In the end, Blackstone executives avoided the issue altogether by basing their investment decision on Microsoft’s creditworthiness and the terms of its lease payments. They looked at CoreWeave’s contract with the tech giant and thought it offered greater protection to a potential lender than similar deals they’d seen, the person said.

“That deal was the most intensive process that we went through,” said Brannin McBee, a founder of CoreWeave and the firm’s chief development officer. “And [it was] one of the most important because many on Wall Street did not yet understand the long-term value of GPUs at the time.”

Many other companies have since replicated the structure of the Blackstone-CoreWeave deal to underwrite subsequent loans for GPUs, often also relying on the end user’s creditworthiness. That is beginning to change, Khaira said. Earlier this year, Blackstone participated in a deal that gave CoreWeave more money than its current leases would support—a wager by the lenders on its ability to keep signing a bounty of new leases.

Looking ahead, Khaira is focused on finding the next big bet. Open-source models are a big trend, but understanding how to invest in them will be difficult, he said. Their proliferation challenges the AI business models Blackstone is funding and provides less opportunity for the firm to use its capital advantage.

Still, Khaira thinks the trend isn’t going to fade away. He summed up the growing trend in AI with succinctness. “Open source is going to be important,” he said.

Iranians Are Running Out of Gas as Economic Squeeze Takes Hold

Cuts to subsidies and quotas fuel anger and spur walkouts by truck and taxi drivers

Long lines at gas stations. Strikes by truckers. A government struggling to maintain the subsidies that had helped much of the population keep their heads above water.

The economic fallout from the war and the American blockade is adding to the pain facing ordinary Iranians who are already struggling with a plunging currency, worsening joblessness and rising prices for everything from food to trash bags.

On Monday, the government doubled some gasoline prices to the equivalent of $0.04 a liter. Filling a tank after the cheapest rations are exhausted could now cost $2 for a car and $5 for a truck, a drain for Iranians, most of whom don’t earn much more than $100 a month.

Some gas stations ran dry as drivers rushed to fill up before the new prices took effect. The increases were directed at passenger vehicles filling up beyond their allocated quotas and come after Tehran already cut the monthly subsidized allocations. Some drivers, unable to get fuel, were left stranded, and taxi drivers and truckers spoke out against the worsening living conditions.

The Islamic Republic has been forced to slash subsidies as the cost of public support rises. It also is scrambling to repair damage done to its refineries during the war and faces difficulties importing gasoline through the blockade.

On Wednesday, a driver in Aryanshahr, in the conservative heartland of northeast Iran, said he was stranded with his family at a gas station after trying to refuel.

“They say the gasoline is finished; until tomorrow,” he said in a video posted by the Union of Truckers and Drivers Organizations Across Iran, an independent trade union representing the transport sector. It was verified by Storyful, which is owned by News Corp, parent company of The Wall Street Journal.

Workers and retirees in the telecommunications, oil and teaching sectors have protested deteriorating living conditions. They are now being joined by truck and taxi drivers disproportionately hurt by the fuel crisis.

On Thursday, 120 taxi drivers in the eastern province of Kerman protested a cut in their allocation of subsidized fuel, according to the Union of Truckers and Drivers. They said they were now out of supplies for a third of every month.

“We are waiting 20 days for passengers, 10 days struggling with fuel shortages!” one of them told the union.

Workers for delivery and ride-share service Snapp, the Iranian version of Uber and once a symbol of the country’s business hopes, also went on strike this week in several cities.

Snapp launched in 2014 during a period of economic opening and is now one of the country’s biggest private employers, with 3 million drivers. In Arak, an industrial hub in western Iran, dozens lined up Monday in front of the governor’s office and said they could no longer make ends meet.

One held a placard that said, “These fares don’t keep the wheels of life turning,” according to a video verified by Storyful.

On Sunday, drivers paraded across the main thoroughfares of Semnan, a city east of Tehran, blocking traffic, according to footage verified by Storyful.

“We’ve all stopped; no one is working,” one of the drivers said in a video.

The fuel crisis is also triggering discontent among bigger transporters. In late August, truck drivers at the Mehran terminal on the border with Iraq went on a one-day strike to protest fuel shortages, according to the Human Rights Activists News Agency, a U.S. nonprofit. The crossing plays a key role in bringing food staples to the country.

On Tuesday, truckers in the Strait of Hormuz port of Bandar Abbas, which handles the bulk of Iran’s container traffic, warned they could follow suit.

“It is the driver and the driver’s family who have to pay for it from their pockets,” the port’s truckers said about fuel price hikes in a statement posted by Iran’s Union of Truckers and Drivers. “The issue is that we can no longer bear these pressures.”

Transporters say they are experiencing fuel problems they didn’t face during the active combat of the first month of the war with the U.S.

Haulers “were busy transporting cargo during the war and under missile attacks and did not stop the flow of cargo even for an hour,” Jalal Mousavi, vice president of the country’s Truck Drivers Association, which is close to the government, told the state-controlled Iran Labor News Agency on Sunday. But today, “drivers face long lines to refuel.”

Inflation, already running at 128% in August for food, is set to worsen after the Iranian currency fell sharply in recent weeks, as diplomatic progress stalled and the U.S. tightened its economic pressure campaign.

On Wednesday, the rial crossed 2.3 million to the dollar, a new low.

Snapp, which also offers delivery services, is now letting customers buy groceries and even taxi services in four installments.

A Tehran dweller in his 70s said he had been shocked by the price of plastic products. Israel hit Iranian petrochemical plants hard early in the war. A roll of 30 garbage bags now costs the equivalent of $4.26.

He owns property and said he has raised the rent he charges by 250% over the past five years to a monthly $149.

Another resident in her 40s said she now shops for food in warehouses used by wholesalers and has had to cut spending for her child’s school supplies.

There are still signs of wealth, she said, suspecting there are people making money off the scarcity caused by the sanctions. The wealthy still shop for expensive jewelry at a luxury shopping center in Tehran.

But most have become extremely poor, she said. It has become a subject of plays, painting exhibitions and independent films.

“Everything is about poverty,” she said.

Adani engineers biggest fund raise for airports

India’s Adani Group is doubling down on its airport business, expanding it to international markets, as well as increasing its capacity in India. Earlier this year, Adani Airport Holdings made a bid to operate Sicily’s main airport. Jeet Adani, the group’s director of airports and son of founder Gautam Adani, told the FT the company would now also “very selectively” seek other opportunities “of size and relevance” in international markets. The conglomerate is also exploring making a bid for Associated British Ports, Britain’s largest port operator, in what would be its first investment in the UK.

These moves come after the decision by the US Justice Department in May to drop charges against Gautam Adani and his nephew, Sagar. The charges related to an alleged bribery scheme over a solar power project in India, and were later dismissed by a US court. The same month, the Securities and Exchange Commission settled a fraud case against the two. Both have consistently denied any wrongdoing.

On Wednesday, the conglomerate also announced that it was raising $1bn from a consortium of investors — including Temasek, BlackRock, Alpha Wave Global and Premji Invest — for its airports subsidiary. The transaction values Adani Airport at $18bn, and will end up giving the investors a 5.54 per cent stake, once all three tranches of the investment are in. The first leg of the investment will be completed by June 2027. This is one of India’s largest primary equity investments by financial institutions in India’s airports sector.

This money is earmarked for the group’s domestic business, and to fund its plans to expand and modernise airport infrastructure, develop integrated airport-city ecosystems and scale its passenger-facing and non-aeronautical businesses, including ground handling. Adani now runs eight airports in India. It also plans to bid for the 11 airports the Indian government plans to offer under a 50-year public-private partnership lease model. In 2019, the company made winning bids for all six airports that the government put on the block under a similar structure.

Media reports at the end of last year indicated that the conglomerate was looking at an overall investment of $15bn over the next five years in its airport business. Its stated goal is to increase passenger capacity to 200mn a year. 

This week’s fund raise at the $18bn valuation also matters as a benchmark, since it positions the company well above its listed rival, GMR Airports, which was trading at roughly $11bn on a market-cap basis as of Tuesday this week. That gap gives Adani leverage as it prepares the ground for an eventual initial public offering of the airports unit, which the group is targeting for fiscal year 2028.  

Adani Group plans international airports push

Indian conglomerate seeks opportunities of ‘size and relevance’ after US justice department drops charges against billionaire chair Gautam Adani

The airports arm of Adani Group is planning a push into the international market after the US justice department’s decision to drop charges against the Indian conglomerate’s billionaire chair Gautam Adani.

Adani Airport Holdings, which at present operates only in India, earlier this year put in a bid to operate Sicily’s main airport, and Jeet Adani, who is Gautam Adani’s younger son and controls the company, told the FT it would now “very selectively” seek other opportunities “of size and relevance”.

Adani Group’s interest in overseas airports comes as the conglomerate explores making a bid for Associated British Ports, Britain’s largest port operator, in what would be its first investment in the UK.

A group of global and domestic investors, including BlackRock and Temasek, will invest about $1bn in Adani Airport for a 5.54 per cent share, valuing it at $18bn, the Indian company announced on Wednesday. It said the investment represented “a significant institutional endorsement” of its scale, operating capabilities and long-term growth potential.

Jeet Adani told the FT that the $1bn investment would primarily be used to increase Adani Airport’s footprint within India, where it plans to increase the total annual capacity of its eight airports over the next five years to 200mn passengers from the current 120mn. 

Adani said the group would also bid for the 11 airports the Indian government is planning to offer under a 50-year public-private partnership lease model. “Absolutely we’ll be participating in those,” he said. “We are also always looking for some greenfield opportunities within the country.” 

Adani Airport made winning bids for all six airports that the Indian government put on the block under a similar structure in 2019.

It has since acquired Mumbai’s main airport and built a new one near the city, making it India’s largest private operator and prompting concerns about a lack of competition in the sector. 

Last month, the country’s civil aviation ministry said it would cap the number of airports awarded to a single bidder “to mitigate the risks arising from market concentration and potential overleveraging, including their possible cascading impact across projects”.

The US Department of Justice announced in May that it was dropping charges filed in 2024 against Gautam Adani and his nephew Sagar Adani related to an alleged bribery scheme over a solar power project in India. The same month, the Securities and Exchange Commission settled a fraud case against the two. Both have consistently denied any wrongdoing.

“These two years when there were all these questions going around, the way we went [was] very focused on only our business, on only our execution,” Jeet Adani said. “That’s what investors have seen through this cycle.” 

He said Adani Airport offered its investors a “very unique opportunity . . . where they have the ability to get exposure to the infrastructure sector of India as well as the consumer sector”.

Proprietary trading fund expands into areas once dominated by hedge funds

Jane Street Capital has emerged as a leading player in Asia’s multibillion-dollar block trading industry, filling a void created by the closure of Simon Sadler’s Segantii, in a sign of how the proprietary trading firm is muscling into areas previously dominated by hedge funds.

The New York-based group has become a “top three” call for investment bank equity syndicate and trading desks looking for buyers of large parcels of shares in Asian companies, according to four people familiar with the situation.

Block trading is a potentially risky but high-reward pursuit for participants, which are often able to acquire shares at significant discounts to market prices.

Sellers benefit from a one-and-done deal, as offloading a large shareholding into the open market is likely to have a significant impact on the stock’s price.

The industry is an opaque subsection of equity capital markets, with block sales rarely made public. Communications between investment bankers and potential block buyers have also become more heavily regulated, particularly in Hong Kong.

Total block sales in Asia topped $48bn in 2024 and 2025 according to figures from Dealogic. Companies listed in India notched up the most block sales, followed by those on Hong Kong and Japanese bourses.

Jane Street’s rise comes after the fall of Segantii, the hedge fund run by Blackpool FC chair Sadler that had been a dominant force in Asian block trading. It closed in 2024 after Sadler was charged with insider trading by Hong Kong regulators.

Sadler’s Hong Kong trial for trading in clothing retailer Esprit stock ahead of a block sale began in May. He has pleaded not guilty.

Jane Street, a New York-based firm that trades its own capital, was previously “active but not top tier” in Asian block trading before its recent ascent, said a person familiar with its activities.

The people said the firm boasted of its ability to hedge market risk and retain holdings for longer than rival hedge funds, partly due to its rapid growth — making it a more suitable investor.

Jane Street has become one of the largest financial institutions in the US in recent years and now holds positions for longer on its massive balance sheet.

Some of the firm’s riskier bets have soured, however. In July, it posted the first monthly loss in a decade after a massive sell-off in AI-related stocks.

“You always had people try to go into the block business because of the feeling that this was one of the few areas where you could generate alpha [excess returns] through relationships with the syndicate desks,” said an industry figure who has worked with Jane Street.

Jane Street last year made a high-profile commitment to Hong Kong, its Asian headquarters, by paying about $4mn a month to lease six floors of a new harbourside development.

Jane Street declined to comment.

Intelligence findings say Tehran is assembling stockpiled components into weapons in underground facilities

Iran has resumed its production of ballistic missiles using stockpiled components and working in underground facilities, officials from the U.S. and Middle East familiar with the matter said, eroding what the U.S. and Israel have touted as a major achievement of the war.

Despite heavy attacks on its missile sites and industrial facilities during the initial phase of the war, Iran has been busy assembling liquid-propellant missiles, which have to be fueled just before launch, as well as solid-propellant missiles, which can be stored ready to fire, some of the officials said.

Intelligence points to activity at several underground sites, including the Khojir missile facility in southeastern Iran, those officials said. Iran is also attempting to build new underground assembly points to avoid getting struck again, they said.

So far, Iran is mainly assembling the new missiles from existing components in more limited quantities than before the war, the U.S. and regional officials said. The U.S. and Israel damaged a number of industrial facilities needed to produce missile components and missiles themselves, and the naval blockade has complicated imports of parts and ingredients for solid fuel.

The renewed production underscores the difficulty of fully dismantling Tehran’s missile program, a goal of the war the U.S. and Israel launched on Feb. 28. It also extends Iran’s ability to hold on in the war of attrition that pits its supplies of the weapons against shrinking U.S. and Gulf stockpiles of missile interceptors.

“When there are no bombings of the facilities, you can replace damaged infrastructure, and you can buy new components from other countries and store them in the facilities,” said Tal Inbar, a senior analyst at the U.S.-based Missile Defense Advocacy Alliance. “You have to be extremely naive to think that Iran is not rebuilding its missile-production capabilities.”

The office of Israel’s prime minister didn’t reply to a request for comment.

A White House official didn’t directly address the question of whether Tehran had resumed production of ballistic missiles but said that Iran’s nuclear facilities had been obliterated and its military forces severely degraded. “Iran is weaker now than ever before, and President Trump will never allow Iran to have a nuclear weapon,” the official said.

Sean Parnell, the Pentagon’s chief spokesman, said the U.S. had “destroyed up to 90% of Iran’s drone, ballistic missile, and naval industrial base” and “significantly degraded” Iran’s ability to launch missiles and drones.

The U.S. and Israel severely diminished Iran’s missile program early in the war with thousands of strikes aimed at production sites, storage facilities, missiles and launchers. But Iran has used the period of calm this summer to rebuild its military capabilities with the belief that the ceasefire is unlikely to hold.

A U.S. official said Iran probably resumed low-rate production after signing a preliminary deal with Trump in mid-June to open the Strait of Hormuz and begin talks to wind down the war. Tehran was believed to have the ability to assemble at least a couple of hundred missiles from components it had on hand, the official said.

Before the war, Iran stockpiled components including finished warheads, airframes, and guidance and control systems, said Jim Lamson, a visiting research fellow at King’s College London and former CIA analyst who specialized in the Iranian military.

He pointed to older photos and videos released by Iran that show many such components lined up against the walls of underground facilities. The number of new missiles that Iran can produce depends on the depth of those stockpiles and how many underground facilities are operative.

“We could be talking about hundreds of missiles or possibly thousands of missiles,” Lamson said.

Iran ran down its stockpiles of finished missiles during the war, leading it to reduce the volume of its attacks, but it still has a lot of capacity. Inbar assessed that Iran still has thousands of ballistic missiles in its arsenal.

Iran continues to fire missiles at U.S. bases across the Middle East, showcasing the diversity of its arsenal. Some missiles used, like the Kheibar Shekan missile, are considered mobile, accurate and relatively cheap to produce.

On Wednesday, it launched a heavy salvo at an air base in Jordan that houses U.S. troops. Videos showed that the projectiles had cluster warheads, a type of missile that had been frequently fired at Israel earlier in the war to challenge air-defense systems.

Defense Secretary Pete Hegseth said in April that Iran’s missile program had been “functionally destroyed” and that it lacked the means to make new missiles.

“You are digging out your remaining launchers and missiles with no ability to replace them,” Hegseth said. “You have no defense industry, no ability to replenish your offensive or defense capabilities.”

Arab and Israeli officials are bracing for continued fighting and the possibility Iran will escalate as the U.S. economic chokehold tightens. In recent days, Iran has launched a series of attacks on U.S. warships that resulted in close calls, though none was hit.

Satellite imagery shows Iran is rebuilding everything from bridges and roads to production sites at a pace that is worrying Israeli officials, The Wall Street Journal has reported. Iran has restored access to tunnel entrances for missile bases that had been collapsed by U.S. and Israeli airstrikes. Weapons stored inside those underground sites are likely to be well-preserved, according to Israeli military assessments.

Challenges to returning to full-scale missile manufacturing include damage to chemical facilities needed to make liquid propellants and industrial mixers for producing solid fuel, Arab officials said.

Lacking a modern air force, Iran established its missile program in the 1980s during the war with Iraq and has increasingly relied on the weapons to deter its foes.

Tehran demonstrated its ability to rebuild its missile program after the 12-day war with Israel in June 2025. Though Israel targeted the missile program with its attacks, Iran was able to rebuild its stockpiles faster than expected, leading Israel to warn before the end of the year that more strikes on Iran might be needed.

“You can try to destroy facilities, you can try to destroy the missiles themselves, but it actually has quicker regenerative capacity than the nuclear program, and it’s pretty dispersed,” said Nicole Grajewski, an expert on Iranian strategy at Sciences Po in Paris. “The reason Iran created such elaborate missile infrastructure was because they were worried about this.”