The Russification of Ukraine isn’t just a pivotal moment in geopolitics. It’s also a watershed in the evolution of warfare and a sea change in the global economy.

While mainstream media overflow with war porn, historic red lines are being crossed on the battlefield without fanfare. A Russian “suicide drone” that boasts the ability to identify targets using artificial intelligence has been recorded in action. According to reporting by Wired Magazine, these drones are manufactured by ZALA Aero, a subsidiary of the Russian arms company Kalashnikov.

The sleek white drone resembles a small fighter jet. Fired from a portable launcher, it can travel 130 kilometers per hour for 30 minutes. Classified as “loitering munition,” it is designed to hover in surveillance mode before it crashes into a target, detonating a 3-kilo explosive.

The big difference between this drone and Hitler’s “buzzbombs” is the targeting. ZALA Aero, which debuted the drones at an air show in 2019, claims they feature “intelligent detection and recognition of objects by class and type in real time.”

This is arguably the first time a nation has deployed lethal weapons that remove human beings from the chain of command, but the milestone was sadly inevitable. A UN report last year concluded that a lethal drone with this capability may have been used in the Libyan civil war.

The prospect of killer robots is a staple of science fiction. Now, advances in AI have made such autonomy easier and cheaper, raising the prospect that many weapons could soon decide for themselves who to kill.

The cyber conflict raging behind the Ukraine war is also a seminal moment in the evolution of digital warfare. State sponsored teams are now collaborating directly with ransomware gangs in Russia, creating the first large digital war in history.

For years Russian cybercrime groups have operated unfettered. The Russian government has famously turned a blind eye to the global ransomware industry operating within its borders provided Russian companies and state assets were not targeted.

A recent leak from the notorious Conti ransomware group demonstrates a high level of coordination with hacking groups such as Fancy Bear, Sandworm, and Cozy Bear, who work directly for the Russian Federal Security Service. Conti is credited with extorting $180 million from companies around the globe last year.

The leak included 60,000 chat messages and files. It was first published online at the end of February by an anonymous Ukrainian cybersecurity researcher who infiltrated Conti. The documents reveal that although the relationships are informal, Conti’s activities and targets regularly fall into alignment with FSB priorities and Russian national interests.

In the leadup to the Russian invasion, a large swath of Ukrainian companies and government agencies were hit with denial-of-service attacks and data wipers coordinated by the Kremlin. Russia has also closed off foreign-owned social media apps and denounced Meta as a spyware platform, apparently imitating the “great firewall” strategy that China uses to isolate its citizens from the global Internet.

As the economic and strategic consequences of hacking have grown, national security interests have increasingly infringed upon trade. In this sense, Russia’s sudden embargo on foreign media and internet sources merely echoes an “uncoupling” trend that has impacted IT supply chains for the past decade.

That uncoupling escalated when the US inveighed against Huawei Technologies, China’s captive telecommunications equipment maker. Huawei was officially sanctioned in 2019 for violating US sanctions against Iran. But the US pressure to keep Huawei and ZTE equipment out of 5G networks is primarily a response to mounting evidence that both companies deliberately install “backdoors” in their gear to facilitate Chinese espionage.

The race to onshore supply chains and reduce susceptibility to geopolitical risk is now topic one in boardrooms across the globe, and the semiconductor industry is where the collision between national security and globalism is most evident.

In response to China’s public pronouncements about becoming a chip powerhouse, and in recognition of Taiwan’s increasingly fragile sovereignty, the US and EU have announced $100 billion in subsidies meant to reduce their reliance on chip imports. Both want to claw back their share of the chip market after losing ground in recent decades.

The US accounted for nearly 40% of the world’s silicon wafer production in the 1990s, while the EU accounted for more than 20%, according to figures cited by Washington and Brussels. The U.S. is now below 15% and the EU has about 10%.

China has already been rolling out subsidies and investments – slated to total $150 billion by 2030 – to boost its own semiconductor manufacturing capacity. Though still not competitive in the most demanding product segments, China is catching up. It has also made no secret of its intention to take control of Taiwan, the dominant fabless semiconductor player globally, via invasion if necessary.

The more prosaic explanation for this subsidy race is that Covid 19 lockdowns drastically impacted chip inventories, leading to ripple effects in dozens of industries worldwide. But great power states clearly are alarmed at the economic dependencies that accompany a global technology industry. The Ukraine invasion once again demonstrates the challenge vividly.

Chip manufacturers don’t make neon, but they depend on significant quantities of it to operate the highly precise lasers that etch silicon wafers during a process called lithography. Two of the largest global producers of industrial neon happen to be in Ukraine. Ukraine produced over 50% of the high-grade neon used by the chip industry last year.

The Semiconductor Industry Association claims that advance purchasing should mitigate the disruption of neon supplies from Ukraine in the near term, but that assumes the war resolves quickly and neon production resumes shortly thereafter. Alternatively, chip shortages that were supposed to recede by 2023 could stretch out even further.

The upshot of all the disruption – from Covid, Ukraine, and the weaponization of supply chains – is a stampede back toward regionalization. In the economy of tomorrow, proximity and resilience may actually matter as much, or more than, labor arbitrage.