US defense official overseeing AI reaped millions selling xAI stock
6 hours ago
- #AI Investments
- #Ethics Violation
- #Defense Department
- Emil Michael, a senior Pentagon official overseeing AI, sold his private investment in Elon Musk's xAI for up to $24 million in January, after holding a stake valued at up to $1 million when he joined the department.
- The sale occurred after the Pentagon announced two agreements with xAI, including selecting its Grok chatbot for defense use, raising ethical concerns about potential conflicts of interest during his ownership.
- Former White House ethics lawyer Richard Painter highlighted that federal law prohibits officials from participating in government actions benefiting their financial interests, calling the transactions 'pretty weird' and possibly criminal.
- The Pentagon defended Michael, stating he was in full compliance with ethics laws, and emphasized its rigorous ethics framework to prevent conflicts of interest.
- Michael's role includes overseeing AI acquisition amid the Defense Department's push for AI adoption, and he has been involved in public disputes with AI contractors like Anthropic, including personal insults on social media.
- Elon Musk's xAI, founded in 2023, has faced controversy over its Grok chatbot's involvement in sexualized deepfakes and has secured funding from major investors, including the Qatar Investment Authority.
- Michael, a former Uber executive with social ties to Musk, was considered for a transportation role under Trump before his Pentagon appointment, and was publicly praised by Defense Secretary Pete Hegseth shortly after the xAI stock sale.