In this week’s dispatches from the American kleptocracy, a senior US ‘department of war’ official made up to a 4,800% return on a private investment in Elon Musk’s xAI. The official’s job, you ask? Why, overseeing the Pentagon’s use of AI, of course.
What a normal thing to write about a functioning and definitely-not-at-all corrupt democracy.
Emil Michael’s official title is ‘under secretary for research and engineering’ at the Pentagon. He manages negotiations with AI tech firms, and has recently been pushing for greater use of the technology in America’s wars.
Speaking at Elon Musk’s Stargate base, US secretary of war Pete Hegseth described Michael:
Our under secretary of war for research and engineering, Emil Michael, right here in the front row, is the war department’s single chief technology officer. One CTO for the entire enterprise.
That ‘one CTO’ bit makes the upcoming string of events all the more egregious.
Pentagon — The timeline
In March 2025, shortly before joining the war department, Michael declared a private investment in xAI worth between $500,000 and $1m. He reported that he owned the shares via the venture capital fund KQ Partners.
Over the next 10 months, the US war department made two deals with xAI. Likewise, in July the Pentagon named xAI’s ‘Grok’ chatbot as one of its four commercial providers to aid the department in the use of AI. Grok itself is more well known for the recent scandal in which it generated non-consensual nude images on Twitter.
However, on 18 December, the Office of Government Ethics (OGE) issued Michael a divestiture certificate. Essentially, this recognised his xAI stock as a conflict of interest, and told him to sell it off.
Early the next week, on 22 December, the Pentagon announced that:
Today, the War Department officially entered into an agreement with xAI, paving the way for the deployment of its advanced capabilities on GenAI.mil. This move builds on the rapid deployment of cutting‑edge AI across the Department’s 3 million military and civilian personnel.
According to the OGE, Michael then sold his xAI holdings on 9 January, for between $5m and $25m. Unfortunately, the OGE documents only provide rough valuations, rather than exact figures — or details where exactly the holdings ended up.
‘In full compliance’
Whilst enriching oneself through advocating a technology you have huge investment within government is a blatant example of corruption in and of itself, there’s a further kicker. As the Guardian pointed out:
xAI, which is the company behind Musk’s Grok chatbot, is not publicly traded, so it is unclear how Michael obtained his position, how it was priced or to whom he sold it.
Musk and Michael appeared to be on friendly terms, with Musk going so far as to give Michael his seal of approval as Trump’s potential transport secretary.
It should also be noted that federal law nominally forbids a US official from using their position for financial gain. Predictably, the Pentagon insisted that Michael was “in full compliance” with ethics laws, adding:
The Department of War maintains a rigorous, multi-layered ethics framework that includes financial disclosure reviews, divestitures where appropriate, and screening to prevent conflicts of interest.
In practice, of course, Trump himself has shown that politicians are free to ignore the stipulation against corruption as they see fit. The man did bean adverts out of the White House, for God’s sake. Likewise, as Forbes recently reported:
Trump added $1.4 billion over the past year, leveraging the presidency for profit. His cryptocurrency ventures, stalled out before the election, exploded after his victory, adding an estimated $1.8 billion to his fortune overall. Another $500 million came in court, where Trump’s legal team succeeded in eliminating a half-billion judgement against him. His once-dormant licensing business surged $400 million, as foreign developers clamored to do business with an American president.
It’s utterly unsurprising that, if you take a man with no morality, put him in the most powerful position on earth, and show him there will be no consequences for his actions, he’ll steal all that he can get his hands on.
Meanwhile, his ultra-rich underlings have also followed suit, using their newfound political power for personal gain. But sure, a $24m return on investment is probably just what “full compliance” looks like now.
Featured image via Britannica
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