Iran threatens US and Israeli targets as protests spread

Good morning. Here's what happened overnight and what you need to know today.

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1.

Iran protests: Iran warned that US military bases, shipping centres and Israeli targets would be “legitimate” if attacked, as mass anti-government protests across the country continue into a third week. Parliament speaker Mohammad Ghalibaf issued the threat on Sunday, local time, saying Iran could act pre-emptively “within the framework of legitimate self-defence”, as lawmakers chanted “death to America”. The warning follows repeated threats from US President Donald Trump, who has said military action is possible if Iranian authorities kill peaceful protesters. On Saturday (Sunday AEDT), Trump posted that “Iran is looking at FREEDOM… The USA stands ready to help.” US officials told The Wall Street Journal Trump has already received some ideas on possible new strike options and will receive a formal briefing on Tuesday covering possible military, cyber and economic measures. According to human rights groups, at least 500 protesters have been killed since unrest began on 28 December over soaring prices and a currency collapse. (NYT)(Bloomberg)(Reuters)(Capital Brief)

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Brain drain: A new wave of Australian AI startup founders is relocating to San Francisco at a speed not seen in years, drawn by bigger funding rounds, close access to leading AI labs, and a growing belief among US customers that serious companies are based in America, Capital Brief reported. The shift challenges the post-COVID consensus that global tech firms could be built from Australia. Founders from Andromeda, Fluency AI, Build Club, Quarterzip.ai, Gecko and Pluralis are among those who’ve moved, with some living in hacker houses in Hayes Valley and the Marina, nicknamed “Little Sydney”. Superpower CEO Max Marchione said he would back any Australian founder who moved to SF to start their company, and claimed to have already written cheques. Fluency AI’s Finnlay Morcombe said capital access made up “probably 55%” of his decision, with customer proximity another key factor. Australians have a major advantage with the E-3 visa, which can be secured in months and for a few thousand dollars. While most are in SF for deals and funding, many are keeping engineering teams in Australia. (Capital Brief)

3.

Meta purge: One month after Australia’s social media age ban came into effect, Meta has removed access to more than 544,000 Instagram, Facebook and Threads accounts it believes belonged to users under 16. Between 4 and 11 December, Meta said it removed 330,639 Instagram accounts, 173,497 Facebook profiles and 39,916 Threads accounts as part of its initial compliance. In its statement, Meta said the law is not meeting its objective of increasing the safety and wellbeing of young Australians, citing concerns including isolating vulnerable teens from online communities, driving teens to less regulated apps, and inconsistent age verification methods across platforms. Meta said legislation should instead require app stores to verify age and obtain parental approval before under-16s download apps. It also said the law’s premise that preventing under-16s from holding accounts avoids “algorithmic experiences” is false, because platforms accessed while logged out still use algorithms. Meta said it will begin integrating AgeKeys, a privacy-preserving age verification tool developed through the OpenAge Initiative, into its apps in Australia in 2026. (Capital Brief)

4.

Credit cap: Donald Trump called for a one-year cap on US credit card interest rates at 10%, effective 20 January, targeting a core profit line for banks and reviving a campaign pledge amid bipartisan concern over high borrowing costs. In a post on Truth Social, Trump said the American public would no longer be “ripped off” by credit card companies charging interest rates of 20% to 30%, and framed the move as part of a broader push for affordability. He did not say how the cap would be implemented. Lawmakers from both parties have in the past proposed bills to cap credit card rates at 10%, including Senators Bernie Sanders and Josh Hawley and Representatives Alexandria Ocasio-Cortez and Anna Paulina Luna. Elizabeth Warren said the call was meaningless without a bill. Banking industry groups issued statements warning the cap would “reduce credit availability” and drive borrowers toward higher-cost alternatives. Bill Ackman said it was “a mistake” and could lead to widespread cancellations. According to Fed data, the average credit card interest rate is about 21%, with Americans carrying more than USD1.2 trillion in credit card debt. (Bloomberg)(Reuters)(BI)(ABA)

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Oiled credit: Donald Trump declared a national emergency and signed an executive order to prevent courts or creditors from seizing Venezuelan oil revenue held in US Treasury accounts. The order, announced Saturday, affirms the funds are the sovereign property of Venezuela held in US custody for governmental and diplomatic purposes, and “not subject to private claims”. A White House fact sheet said the move is intended to preserve the funds for advancing US foreign policy goals and to prevent their seizure to satisfy debts or other legal claims. The directive comes after the Trump administration said the US would use proceeds from the sale of 30 million to 50 million barrels of Venezuelan crude to benefit the Venezuelan and American people. On Friday, Trump met with about a dozen energy executives at the White House, including leaders from Chevron, ExxonMobil and ConocoPhillips, as part of a push to secure USD100 billion ($149 billion) in private investment to rebuild Venezuela’s oil industry. ConocoPhillips, which left the country nearly two decades ago after its assets were nationalised, is Venezuela’s largest non-sovereign creditor. Ryan Lance, its CEO told Trump the company is owed USD12 billion. Trump said the US would not focus on past losses, calling it “their fault”, and responded, “Well, good write-off.” (Trump order)(Fact Sheet)(Reuters)(The Guardian)

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Syrian strikes: The US military carried out major strikes on Islamic State targets across Syria on Saturday local time, launching more than 90 precision munitions at over 35 sites, US Central Command said. The operation involved more than 20 aircraft including Jordanian fighter jets, and was launched in response to a December ambush near Palmyra that killed two US soldiers and a civilian interpreter. The Pentagon said the strikes were aimed at preventing future attacks and protecting US and partner forces in the region. Meanwhile, the last Kurdish-led Syrian Democratic Forces (SDF) fighters withdrew from Aleppo on Sunday, ending Kurdish control of pockets held since 2011, Reuters reported citing Syrian state-run Ekhbariya TV. SDF commander Mazloum Abdi said the evacuation of fighters and civilians from the Ashrafiyah and Sheikh Maksoud neighbourhoods followed a ceasefire deal brokered through international mediation. Reuters reported more than 140,000 people were displaced during the fighting. (Reuters)(NYT)(NBC)(AP)

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Arctic Sentry: European countries, led by the UK and Germany, are discussing plans to boost their military presence in Greenland to show US President Donald Trump that Europe is serious about Arctic security, Bloomberg reported. Germany will propose a joint NATO mission to monitor and protect the Arctic region, including Greenland, the news agency said citing anonymous people familiar with the plans. The proposed “Arctic Sentry” operation would be based on NATO’s existing “Baltic Sentry” mission. It comes as Trump told reporters on Friday he wanted to “make a deal” for Greenland but warned that “if we don’t do it the easy way, we’re going to do it the hard way”. The comments triggered a flurry of diplomatic activity, with Denmark and Greenland’s foreign ministers planning to travel to Washington to address what Copenhagen says are persistent factual errors. Sweden’s Prime Minister Ulf Kristersson criticised the US rhetoric and said Denmark should be thanked, not threatened. (Bloomberg)(Reuters)(Capital Brief)

8.

Grok blocked: Indonesia and Malaysia have restricted access to Elon Musk’s Grok AI, becoming the first countries to ban the system over its generation of inappropriate content. Indonesia’s Communications and Digital Affairs Ministry imposed a temporary ban on Saturday to protect women, children and the community from fake pornographic material created using AI. The ministry requested immediate clarification from X, and Minister Meutya Hafid said the government considers non-consensual deepfake sexual practices a serious breach of human rights, dignity and national security. Malaysia’s internet regulator then said on Sunday it was limiting access to Grok until safeguards are in place to prevent AI-generated content that may breach Malaysian law. It said it had issued notices to X Corp and xAI LLC, but their responses did not address the AI tool’s inherent risks. The restrictions follow xAI’s decision on Friday to limit Grok’s image-generation feature on X for most users, after the tool generated undressed images of women and children and drew widespread condemnation. The feature now requires a paid subscription, though the standalone Grok app still allows image generation. (Bloomberg)