Russia Policy Monitor No. 2698

AN AI RACE WITHOUT RUSSIA
As governments around the world race to exploit artificial intelligence for economic and military advantage, Russia is largely missing from the conversation. This is so despite the crucial role that AI-enabled drones have played – and continue to play – in its offensive against Ukraine, as well as President Vladimir Putin's earlier assertion that leadership in AI equates to global power, not to mention Russia's historically-robust engineering talent. Russian companies are disincentivized from investing in AI because of the Kremlin's authoritarian crackdown on internet freedom, which began before 2022 but has intensified since the invasion of Ukraine.

Domestically, firms have been pressured to censor politically sensitive content, creating an environment hostile to innovation and risk-taking. In response to Western sanctions, many companies have relocated abroad. Yandex, once a symbol of Russia's potential to build global tech giants beyond the oil and gas sector, has effectively split in two, with its Western operations, now known as Nebius, cutting ties with Russia entirely. Those firms that remain, like Yandex's Russian branch, survive largely because they face no foreign competition. As a result, any hope that a Russian tech company might achieve global recognition has evaporated. (Financial Times, September 29, 2025)

A RUSSIAN RESPONSE TO EUROPE'S FROZEN ASSETS PLAN
As the European Union considers plans to use frozen Russian assets as a "reparations loan," Russia is preparing to seize the assets of Western companies still in the country. President Putin has greenlit plans to nationalize or sell off the holdings of hundreds of Western companies, including UniCredit SpA, Raiffeisen Bank International AG, PepsiCo Inc., and Mondelez International Inc., if the EU advances its plan. The Kremlin has already seized roughly $48 billion in capital from citizens with allegedly "extremist" views in order to support the war effort in Ukraine. However, it has thus far refrained from confiscating internationally owned assets. The implementation of such a contingency plan therefore would constitute a significant escalation in Moscow's strategy of economic coercion. (Bloomberg, October 1, 2025)

DENMARK WARNS OF MOUNTING RUSSIAN HYBRID WARFARE
The Danish Defence Intelligence Service, Denmark's official intel agency, is warning of growing Russian hybrid warfare directed against the Scandinavian state and other NATO members. In its latest threat assessment, DDIS concludes that Russian interference has intensified markedly since the spring, and it is "highly likely that the hybrid threat from Russia will increase in the coming years." The assessment ranks the threat of sabotage against the Danish Armed Forces as "high." Likewise "high" is the threat of military provocations directed at other Alliance members. All of this is geared toward a clear objective.

"Russia is carrying out hybrid attacks against the West on a much larger and more aggressive scale than before the war in Ukraine," the DDIS study documents. "Russia uses hybrid activities to weaken NATO's political cohesion and decision-making capacity. Russia's aim is not to achieve quick gains, but rather to create a sustained state of uncertainty in which NATO's cohesion is gradually undermined." Moreover, it warns, Moscow is testing NATO resolve through this campaign, and "will likely become more willing to intensify its hybrid attacks if the alliance fails to respond." (Government of Denmark, October 3, 2025)

MOSCOW HELPS BEIJING PREPARE TO SEIZE TAIWAN
UK think tank the Royal United Services Institute (RUSI) has released a cache of leaked documents revealing deepening military cooperation as part of Russia and China's "no limits" partnership. The documents, a collection of contracts and correspondence, detail Russian sales of military equipment, technologies, and drone combat expertise to increase Chinese air maneuver capabilities. Experts familiar with the documents are particularly concerned that this would enhance Beijing's ability to launch airborne landing operations against Taiwan as a precursor to direct amphibious invasion of the island.

The rationale is clear. Russia has a vested interest in the escalation of global conflict, the analysts say. Given the massive investment in the invasion of Ukraine, deepening instability abroad is the "only way they can convert that means into proper geopolitical power." In addition to bolstering the Chinese military, Moscow may employ hybrid tactics that would allow Russia to influence Taiwanese society and lay the groundwork for potential aggression, they argue. (Radio Free Europe/Radio Liberty, October 1, 2025)