A high-profile U.S. defense department official who oversees the agency’s artificial intelligence work made a profit of up to $24 million from selling a private investment in Elon Musk’s AI company earlier this year, according to government ethics records released this month.
The official, Emil Michael, serves as the Pentagon’s under secretary for research and engineering under the Trump administration. He oversees negotiations with AI companies and has been pushing the Defense Department to expand the use of artificial intelligence more quickly and broadly.
When Michael joined the department, the value of his stake in xAI was reported to be no more than $1 million. The ethics filings indicate that the sale later produced gains far beyond that original holding, with the transaction worth as much as $24 million in profit.
The Guardian reported that the sale came after the Pentagon had entered into an agreement with xAI, drawing attention to the overlap between Michael’s role in shaping the Defense Department’s AI strategy and his financial interest in the company.
An expert quoted in the reporting said federal law prohibits officials from taking steps in the course of their duties that benefit their own financial interests. The ethics records and the timing of the transaction have therefore raised questions about conflicts of interest in one of the government’s most closely watched technology portfolios.
Michael’s position places him at the center of the Defense Department’s efforts to work with private AI firms as the military seeks to accelerate adoption of the technology. His office has been involved in discussions with companies developing advanced AI systems, including those with potential defense applications.
The released records do not suggest that Michael’s holdings were unique among government appointees with prior private-sector investments, but the scale of the profit has made the sale especially notable. The matter underscores the broader scrutiny facing senior officials who retain financial ties to companies doing business with the federal government.
The disclosure comes at a time when AI procurement and partnerships are becoming increasingly important to the Pentagon. Officials have been pushing for faster integration of AI across military and research functions, while watchdogs and ethics specialists continue to monitor whether those relationships create conflicts between public duties and private gain.
