• Adidas' CEO has said tariffs "will directly increase the cost of our products for the US."
• The retailer sources many products from Vietnam and Indonesia, which are facing import levies.
• The company joins other companies, including rival Nike, saying they will raise prices to offset tariffs.

Adidas is the latest company to say it will raise prices in the US because of tariffs.

"The latest iteration of tariffs will directly increase the cost of our products for the US," CEO Bjørn Gulden said Wednesday, adding the levies could cost the company 200 million euros, around $218 million, in the second half of the year.

He added the company had a "negative impact in the double-digit euro millions" from tariffs in Q2.

In a statement accompanying the sportswear giant's most recent results, Gulden added that the company was wary of a bullish outlook for the rest of 2025 because, "We feel the volatility and uncertainty in the world does not make this prudent. We still do not know what the final tariffs in the US will be."

He was speaking as countries from which Adidas sources much of its products face tariffs.

Vietnam, Adidas's largest sourcing country, accounting for 27% of the company's total volume, will face a 20% tariff from August 1. Indonesia made 19% of Adidas' products and will face a 19% tariff.

Adidas joins other companies saying they will raise prices because of tariffs. Its rival Nike said at the end of June that it would raise prices in the US to offset a predicted $1 billion rise in costs.

Macy's, Shein, Temu, Ford, and Walmart have also said they will raise prices to offset tariffs.

Gulden added the company does not know "what the indirect impact on consumer demand will be should all these tariffs cause major inflation."

He said Adidas will stick to its initial outlook for 2025 of operating profit between €1.7 and 1.8 billion. "We currently feel confident to deliver it, but of course this might change," Gulden said.

Adidas's stock was down 7% to €13.85 a share on Frankfurt's stock exchange at 12:30 p.m. local time.

Revenue jumped about 2% year-on-year to almost €6 billion in the three months ending June 30. Operating profit rose 58% year-on-year in the second quarter to €546 million.

Last week, Microsoft announced that it would no longer use China-based engineering teams to support the Defense Department’s cloud computing systems, following ProPublica’s investigation of the practice, which cybersecurity experts said could expose the government to hacking and espionage.

But it turns out the Pentagon was not the only part of the government facing such a threat. For years, Microsoft has also used its global workforce, including China-based personnel, to maintain the cloud systems of other federal departments, including parts of Justice, Treasury and Commerce, ProPublica has found.

This work has taken place in what’s known as the Government Community Cloud, which is intended for information that is not classified but is nonetheless sensitive. The Federal Risk and Authorization Management Program, the US government’s cloud accreditation organization, has approved GCC to handle “moderate” impact information “where the loss of confidentiality, integrity, and availability would result in serious adverse effect on an agency’s operations, assets, or individuals.”

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Welcome to Edition 8.04 of the Rocket Report! The Pentagon's Golden Dome missile defense shield will be a lot of things. Along with new sensors, command and control systems, and satellites, Golden Dome will require a lot of rockets. The pieces of the Golden Dome architecture operating in orbit will ride to space on commercial launch vehicles. And Golden Dome's space-based interceptors will essentially be designed as flying fuel tanks with rocket engines. This shouldn't be overlooked, and that's why we include a couple of entries discussing Golden Dome in this week's Rocket Report.

As always, we welcome reader submissions. If you don't want to miss an issue, please subscribe using the box below (the form will not appear on AMP-enabled versions of the site). Each report will include information on small-, medium-, and heavy-lift rockets, as well as a quick look ahead at the next three launches on the calendar.

Space-based interceptors are a real challenge. The newly installed head of the Pentagon's Golden Dome missile defense shield knows the clock is ticking to show President Donald Trump some results before the end of his term in the White House, Ars reports. Gen. Michael Guetlein identified command-and-control and the development of space-based interceptors as two of the most pressing technical challenges for Golden Dome. He believes the command-and-control problem can be "overcome in pretty short order." The space-based interceptor piece of the architecture is a different story.

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Donald Trump vowed to save TikTok before taking office, claiming only he could make a deal to keep the app operational in the US despite national security concerns.

But then, he put Vice President JD Vance in charge of the deal, and after months of negotiations, the US still doesn't seem to have found terms for a sale that the Chinese government is willing to approve. Now, Trump Commerce Secretary Howard Lutnick has confirmed that if China won't approve the latest version of the deal—which could result in a buggy version of TikTok made just for the US—the administration is willing to shut down TikTok. And soon.

On Thursday, Lutnick told CNBC that TikTok would stop operating in the US if China and TikTok owner ByteDance won't sell the app to buyers that Trump lined up, along with control over TikTok's algorithm.

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On Wednesday, the White House released "Winning the Race: America's AI Action Plan," a 25-page document that outlines the Trump administration's strategy to "maintain unquestioned and unchallenged global technological dominance" in AI through deregulation, infrastructure investment, and international partnerships. But critics are already taking aim at the plan, saying it's doing Big Tech a big favor.

Assistant to the President for Science and Technology Michael Kratsios and Special Advisor for AI and Crypto David Sacks crafted the plan, which frames AI development as a race the US must win against global competitors, particularly China.

The document describes AI as the catalyst for "an industrial revolution, an information revolution, and a renaissance—all at once." It calls for removing regulatory barriers that the administration says hamper private sector innovation. The plan explicitly reverses several Biden-era policies, including Executive Order 14110 on AI model safety measures, which President Trump rescinded on his first day in office during his second term.

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• The US Army fired a Standard Missile-6 from its Mid-Range Capability, or Typhon, system in Australia.
• The successful live-fire test sank a maritime target.
• The MRC's deployment in the region has previously and repeatedly irritated China.

The US Army fired its new MRC missile system in the Western Pacific for the first time, striking and sinking a maritime target.

The Mid-Range Capability, or Typhon, missile system drew China's ire during a previous deployment, with Beijing repeatedly warning that its presence risks escalating tensions. The Army sees the weapon as an essential strike asset that closes a critical capability gap in the region.

The Army said on Tuesday that the 3rd Multi-Domain Task Force successfully fired a Standard Missile-6 using the versatile MRC launcher and sank an unspecified sea target. The test occurred earlier this month during the joint Talisman Sabre exercise in northern Australia.

The service said it was the first time the land-based MRC had been fired west of the international date line, which splits the Pacific Ocean.

"The deployment of the MRC and successful execution of a [Standard Missile-6] live fire against a maritime target is another significant step forward in our ability to deploy, integrate, and command and control advanced land-based maritime strike capabilities," Col. Wade Germann, commander of the 3rd MDTF, said.

While this was the first live test of the MRC in the region, it has been deployed there before, notably during a joint exercise with the Philippines last year. The MRC is a high-value system for the Army, filling both a capability and range gap by providing a flexible way to fire both the SM-6s and the Tomahawk Land Attack Missile. 

The MRC's development followed the 2019 US withdrawal from the 1987 Intermediate-Range Nuclear Forces Treaty over concerns about Russian violations. The treaty banned nuclear and conventional ground-launched ballistic and cruise missiles with ranges of 500 to 5,000 kilometers.

The withdrawal, overseen by the first Trump administration and driven by Moscow's SSC-8/9M729 missile, opened the door to the development of previously banned weapons.

When the MRC was first deployed to the Philippines, China was quick to express its frustration. In September of last year, Lin Jian, a spokesperson for China's foreign military, called the deployment "a move to turn back the wheel of history," adding that "it gravely threatens regional countries' security, incites geopolitical confrontation, and has aroused high vigilance and concerns of countries in the region."

Earlier last year, he said that Beijing "strongly opposes the US strengthening forward deployment at China's doorstep."

China notably maintains a large arsenal of ballistic missiles, including many intermediate-range systems able to threaten US and allied forces in the region.

China also expressed its irritation to the Philippines last year. In August 2024, Philippine Foreign Secretary Enrique Manalo said that his Chinese counterpart, Wang Yi, had expressed concerns the weapon could destabilize the security and relations of the region and that when they discussed it, China "made it very dramatic." China has warned Manila against igniting an arms race.

Beijing has said the Philippines, a key US ally, is serving American interests to the detriment of its own. Manila has expressed interest in the MRC's capabilities as a useful combat capability.

China's US embassy didn't immediately respond to BI's request for comment on the test.

The MRC is a work in progress for the Army, which is still exploring how best to employ it. During the MRC's deployment to the Philippines, US personnel also tinkered with and reworked the system in the field, according to a Government Accountability Office report earlier this year, providing user input that led to "multiple design changes." 

The test of the MRC in Australia, the Army said, validated the ability to forward deploy long-range precision fires. It also, Germann added, provided valuable insights and lessons for future land-based maritime strike capabilities. Mobile launchers with the ability to strike targets on land and at sea have tremendous potential in Pacific combat.

• China's focus on EVs and AI industries is facing challenges amid price wars and overcapacity.
• Chinese leader Xi Jinping recently questioned if all of China should focus on the same high-tech sectors.
• China's top leadership has pledged to address intensive hyper-competition and price wars.

China bet big on electric vehicles and artificial intelligence — but now its top leader is starting to question whether that bet has gone too far.

On Monday, Chinese leader Xi Jinping questioned the country's single-minded focus on a few high-tech sectors.

"When it comes to new projects, it's always the same few things: artificial intelligence, computing power, and new energy vehicles," Xi said at a meeting about urban development in Beijing, the Chinese Communist Party's People's Daily reported on Thursday.

"Do all provinces in the country have to develop industries in these areas?" Xi asked.

Xi's unusually blunt remarks questioning China's industrial strategy come as the country's top leadership recently pledged to curb intense "involutionary" competition. The remarks show a shift from Beijing's usual pushback against Western criticisms over industry overcapacity and cheap exports.

The comments reflect growing concerns that China's pursuit of dominance in EVs and AI may be backfiring economically and politically.

'Involution' and a deflationary trap

The hyper-competition has become especially acute in the EV sector, where an intense price war has squeezed margins and raised alarms about long-term sustainability.

Beijing is now encouraging market consolidation and cracking down on unhealthy practices. These include abuses such as "compelling businesses to sell goods on a below-cost basis," wrote Lynn Song, ING's chief economist for Greater China, last week.

This comes as deflationary pressure is worsening. China's producer price index, or PPI fell 3.6% in June, the steepest drop in nearly two years.

That's not just bad news for businesses and China's economy. It also risks fueling trade tensions as Chinese exports become cheaper and flood global markets.

China posted GDP growth of 5.3% in the first half of the year. Much of the momentum is likely driven by export frontloading ahead of new US tariffs and temporary consumption subsidies.

Beneath the headline numbers, the Chinese economy remains under strain as consumer confidence remains depressed and youth unemployment stays high.

"It appears the persistent PPI deflation has finally caught the attention of the top leadership in Beijing," wrote economists at Nomura last week.

• The Trump administration is fine with Nvidia selling chips in China.
• Commerce Secretary Howard Lutnick says the best chips will stay within the US.
• Nvidia announced that it has received assurances it can resume selling its H20 chip in China.

The Trump White House says it's content to allow Nvidia to tap into the lucrative Chinese market.

"We don't sell them our best stuff, not our second best stuff, not even our third best," Commerce Secretary Howard Lutnick said on CNBC Tuesday afternoon. "I think fourth best is where we have come out that we're cool."

Nvidia announced on Monday that the Trump administration has signaled it will allow the company to sell its China-specific H20 chip once more. The news sent shares of the world's most valuable company, which eclipsed $4 trillion in market cap last week, even higher.

Nvidia's H20 was designed to be technologically inferior. As Lutnick said, the company also sells three other chips that far surpass the H20's power. Nvidia is already preparing its transition from Blackwell (its most powerful chip) to Blackwell Ultra and has plans for its next superchip, "Vera Rubin."

CEO Jensen Huang has pushed to sell the company's prized chips to China. Before the news, Nvidia said it had lost $8 billion on unshipped orders. The announcement came after Huang met with President Donald Trump at the White House last week.

Lutnick said that the administration shares Huang's view that cutting China off completely from the chips needed to power artificial intelligence advancements won't starve China's AI industry.

"So the idea is the Chinese are more than capable of building their own, right? So you want to keep one step ahead of what they can build so they keep buying our chips, because, remember, developers are the key to technology," Lutnick said.

In the end, Lutnick said, it's better if China becomes reliant on the US for chips.

"So you want to sell the Chinese enough that their developers get addicted to the American technology stack," he said. And that's the thinking. Donald Trump is on it."

• The US Navy is grappling with shipbuilding and maintenance issues and faces a rising China.
• The Middle East conflicts have raised concerns about the Navy's readiness for a war against Beijing.
• A top admiral outlined to BI how the US is preparing for a possible fight.

Bogged down by shipbuilding struggles and maintenance woes, the US Navy faces an uphill battle to get its fleet ready for the next high-end conflict, which could be against China and its rapidly modernizing military.

Adm. James Kilby, the acting chief of naval operations, outlined for Business Insider how the US plans to maintain its edge and fix long-standing readiness problems.

"The Navy is committed to maintaining a ready fleet," Kilby said, explaining that the Navy is working to increase its ship readiness by improving the maintenance processes and reducing delays, increasing the procurement of spare parts, and taking a "focused and deliberate" approach to "manning, training, modernization, and sustainment."

Kilby said that the "goal is to achieve and sustain an 80% combat-surge ready posture by 2027," the year that China's military is expected to be ready to fight a war over Taiwan. Such a war could quickly become a conflict in the Western Pacific, drawing in American and allied militaries against China. Naval forces would have a critical part to play in that fight.

The acting CNO said in April that the Navy's average combat-surge readiness was about 68%.

Last September, then-Chief of Naval Operations Adm. Lisa Franchetti released a plan to increase readiness by 2027, which included a focus on streamlining warship maintenance to eliminate delays, pushing to integrate drones into fleet operations, and retaining personnel to prevent the loss of valuable workforce experience that can be difficult to replace.

"To increase our combat surge readiness," Kilby explained, "we are reducing the number of platforms in depot maintenance through improved business and maintenance practices, as well as certifying training earlier in the force-generation cycle."

The Navy's issues are centered on strained public yards, tremendous maintenance backlogs for combat ships, and stresses on the American shipbuilding industry, hollowed out in the years since the end of the Cold War. Rising costs, deferred maintenance for aging hulls, staffing shortfalls, and industrial and supply chain limitations have created a situation where existing ships aren't being adequately maintained and new ones aren't coming fast enough.

China has the largest navy in the world, and it is building new warships at a faster pace than the US. A larger force size and stronger industry could allow Beijing to endure more losses than Washington in a major conflict between the two adversaries.

US Navy readiness for a Pacific conflict has been a heightened concern since the US became heavily involved in the Middle East conflicts. Aircraft carriers and warships have rotated in and out of the region since the fall of 2023 for near-constant operations focused on threats from Iran and Tehran-backed Houthi rebels in Yemen.

For instance, during Israel's brief war against Iran last month, the Navy positioned two carrier strike groups in the Middle East and moved several other warships capable of ballistic missile defense into the Eastern Mediterranean Sea — putting an immense amount of firepower around the region.

These operations have resulted in extended deployments for aircraft carriers and their crews and have depleted critical missile interceptors that would be needed in substantial quantities for a war against China.

The Middle East conflicts have put a strain on the Navy. Some analysts argue that these fights offer only a glimpse of the kind of high-intensity combat operations that the sea service would potentially face in a Pacific fight.

"While the Navy must respond to today's crises, it cannot do so at the expense of future readiness," Kilby said.

He added that "we must exercise strategic discipline of the use of our forces, while increasing the surge readiness of our Navy without sacrificing scheduled maintenance so that the fleet stands ready for high-end conflict with China."

Chinese firms have begun rushing to order Nvidia's H20 AI chips as the company plans to resume sales to mainland China, Reuters reports. The chip giant expects to receive US government licenses soon so that it can restart shipments of the restricted processors just days after CEO Jensen Huang met with President Donald Trump, potentially generating $15 billion to $20 billion in additional revenue this year.

Nvidia said in a statement that it is filing applications with the US government to resume H20 sales and that "the US government has assured Nvidia that licenses will be granted, and Nvidia hopes to start deliveries soon."

Since the launch of ChatGPT in 2022, Nvidia's financial trajectory has been linked to the demand for specialized hardware capable of executing AI models with maximum efficiency. Nvidia designed its data center GPU to perform the massive parallel computations required by neural networks, processing countless matrix operations simultaneously.

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In mid-2022, when BYD executive Lian Yubo was asked to compare Chinese manufacturing with Tesla’s technology, he remarked that Elon Musk was an example that all Chinese carmakers could learn from.

“Tesla is a very successful company no matter what. BYD respects Tesla and we admire Tesla,” he said in an interview on Chinese state media.

Yet just three years later, Tesla’s technological lead over its Chinese rivals has narrowed dramatically. It is fighting to stay ahead in the world’s largest car market, its sales are falling in many other countries and its efforts to develop fully self-driving vehicles are running into regulatory roadblocks.

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Welcome to Edition 8.02 of the Rocket Report! It's worth taking a moment to recognize an important anniversary in the history of human spaceflight next week. Fifty years ago, on July 15, 1975, NASA launched a three-man crew on an Apollo spacecraft from Florida and two Russian cosmonauts took off from Kazakhstan, on course to link up in low-Earth orbit two days later. This was the first joint US-Russian human spaceflight mission, laying the foundation for a strained but enduring partnership on the International Space Station. Operations on the ISS are due to wind down in 2030, and the two nations have no serious prospects to continue any partnership in space after decommissioning the station.

As always, we welcome reader submissions. If you don't want to miss an issue, please subscribe using the box below (the form will not appear on AMP-enabled versions of the site). Each report will include information on small-, medium-, and heavy-lift rockets, as well as a quick look ahead at the next three launches on the calendar.

Sizing up Europe's launch challengers. The European Space Agency has selected five launch startups to become eligible for up to 169 million euros ($198 million) in funding to develop alternatives to Arianespace, the continent's incumbent launch service provider, Ars reports. The five small launch companies ESA selected are Isar Aerospace, MaiaSpace, Rocket Factory Augsburg, PLD Space, and Orbex. Only one of these companies, Isar Aerospace, has attempted to launch a rocket into orbit. Isar's Spectrum rocket failed moments after liftoff from Norway on a test flight in March. None of these companies is guaranteed an ESA contract or funding. Over the next several months, ESA and the five launch companies will negotiate with European governments for funding leading up to ESA's ministerial council meeting in November, when ESA member states will set the agency's budget for at least the next two years. Only then will ESA be ready to sign binding agreements.

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On Wednesday, Nvidia became the first company in history to reach $4 trillion market valuation as shares rose more than 2 percent, reports CNBC. The GPU maker's stock has climbed 22 percent since the start of 2025, continuing a trend driven by demand for AI hardware following ChatGPT's late 2022 launch.

The milestone marks the highest market cap ever recorded for a publicly traded company, surpassing Apple's previous record of $3.8 trillion set in December. Nvidia first crossed $2 trillion in February 2024 and reached $3 trillion just four months later in June. The $4 trillion valuation represents a market capitalization larger than the GDP of most countries.

As we explained in 2023, Nvidia's continued success has been intimately tied to growth in demand for hardware that runs AI models as capably and efficiently as possible. The company's data center GPUs excel at performing billions of matrix multiplications necessary to train and run neural networks due to their parallel architecture—hardware architectures that originated as video game graphics accelerators now power the generative AI boom.

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• Lily Wu, now 31, was born in the US to Chinese parents and grew up in Boston.
• Her response to the question "Where are you from?" has evolved over time.
• She moved to Hong Kong in her early 20s and now says, "I grew up in the US, but I'm ethnically Chinese."

This as-told-to essay is based on a conversation with Lily Wu, a 31-year-old Chinese American compliance professional who moved to Hong Kong in her early 20s. Her words have been edited for length and clarity.

If you'd asked me where I was from 10 years ago — before I moved to Asia — my answer would've been very different.

"Where are you from?" has become the poster question for how Asian Americans are often treated as foreigners in their own country. I used to reply, "Boston," very matter-of-factly. I grew up there. I'm American. I speak English. It was a defensive answer, like: "Don't challenge me."

Now, I just say, "I grew up in the US, but I'm ethnically Chinese." It's honest, efficient, and I'm less defensive about it than I used to be.

American, born and raised

I was born in Ohio but spent my early years in China while my parents studied in the US as part of the first wave of Chinese students to leave under Deng Xiaoping's 1980s reforms.

We eventually settled in Boston, my hometown. I grew up surrounded by other Chinese or Chinese-American kids, and it felt like a little cultural cocoon.

Later, when I started middle school at Boston Latin School, I met kids from around the world — including China, Vietnam, Cambodia, and Mexico. A lot of kids at my school were local to Boston, but most non-white students, like me, were children of immigrants.

That shift gave me my first understanding of how wide the world was.

I grew up in a Chinese enclave and went to a diverse, progressive school where overt racism wasn't socially acceptable, at least not in my circles.

Cantonese was my first language — my mom's family is from southern China — but over time, I stopped using it. One day, I started answering my parents in English, and they let it stick.

Eventually, we became an English-speaking household.

Looking back, I wish I spoke better Cantonese and Mandarin. Like many Asian Americans, I wanted to fit in — and while maybe my parents could've pushed harder, my brother and I were probably just stubborn.

As a kid, I didn't think much of it, but now I feel a growing pull to reconnect with my roots. I was still surrounded by Chinese culture: I went to Chinese school, played the yangqin (a Chinese instrument), and watched "My Fair Princess," a TV drama, with my mom.

Now, there's so much I still want to learn — not just the language, but everything that comes with it.

Next stop: Hong Kong

I studied international relations and economics at Tufts University, then joined a rotational finance program working across departments. My first role was in asset management in Boston.

For my final rotation, I asked to be placed in Hong Kong, and the company made it happen. I'd spent most of my life in Boston, with a study abroad year and an internship in London, so moving to Hong Kong — a city I'd only visited once as a kid — felt like the right kind of adventure. I was 23 and ready to see more of the world.

The transition was surprisingly smooth. Hong Kong is easy for foreigners to navigate — English is widely spoken, and the infrastructure is world-class.

But being Asian American here is complicated. You blend in until you open your mouth — then people switch to English. It's efficient, but also a reminder that you're not quite "one of them."

Culturally, I'm a "gwei mui" — Cantonese slang for a Westernized girl. I used to feel embarrassed by that, but now I've learned to accept it.

Still, I see the value in understanding Hong Kong more deeply through its language and customs. It's ironic: I spent my childhood trying to be fully American, and now I find myself wanting to be more Chinese.

Asia shifted my perspective

When I visit the US now, I feel a kind of reverse culture shock — the streets are wide and quiet, and hardly anyone walks.

Growing up in the States, I was constantly told how amazing it was, but I was rarely told how great other cities around the world were, too.

That's starting to change, thanks to social media showing things like food delivery robots in China, high-tech toilets in Japan, and Hong Kong trains that run every few minutes. You'd never see that in Boston — I don't miss waiting 30 minutes for the subway in the freezing cold.

Things just run more efficiently here. Still, I love going back to the US to see my parents and friends. I appreciate the space and calm.

But these days, landing in Hong Kong feels more like coming home.

Got a personal essay about moving to Asia that you want to share? Get in touch with the editor: [email protected].

• Last month, China unveiled a mosquito-like spy drone designed for covert military operations.
• The drone's size and weight could limit its uses on the battlefield, military analysts told BI.
• It could still prove to be an effective new surveillance tool, experts say.

Last month, China's National University of Defense Technology unveiled a new spy drone designed to look like a mosquito.

Showcased on the state-run CCTV-7 military broadcaster, the micro-drone appeared to be roughly the size of a human fingernail and featured tiny, leaf-like wings and thin, wiry legs.

While it may not look as impressive as some of the bigger unmanned systems coming out of Ukraine, its stick-thin body is said to be equipped for a range of covert surveillance and military operations.

"As a drone to surveil buildings, especially on the inside, I can imagine it being quite useful for video feeds," Herb Lin, a senior research scholar at Stanford's Center for International Security and Cooperation, told Business Insider.

But its small size may limit its uses on the battlefield.

"If it's real, and powered conventionally (with a battery), its longevity in the air will be limited by battery capacity," Lin said. "Also, it's very light, and therefore easily buffeted by winds. These factors suggest it isn't particularly useful for wide-area surveillance."

Drones can be highly sensitive to weather, in particular strong winds, rain, snow, cold weather, and fog.

And the smaller an aerial drone is, the more susceptible it is to such conditions, Samuel Bendett, an advisor with the Center for Naval Analyses and drone expert, said. "Even indoors, there can be conditions that could interfere with this drones' performance, such as even a slight breeze, an air flow from an AC, an open window, or other obstacles."

Communications are another issue to consider, Bendett continued, as the drone's size means it's unlikely to be able to carry much advanced equipment.

"While it is technically possible to build a tiny UAV like the one displayed by the Chinese developers, its actual performance is likely to greatly vary," he said.

Others say that the new drone is a sign of China's continuing innovation in the sector.

Michael Horowitz, a senior fellow for technology and innovation at the Council on Foreign Relations, said it showed "Chinese researchers in particular want to push forward technological innovation in drones."

It remains unclear how real the capability is, how soon China could field the tech, or the type of missions it could use them for, he added.