Pentagon Official Profits from Musk's AI, Raises Ethics Concerns

0:00Emil Michael, the Pentagon's undersecretary for research and engineering, just cashed out big on Elon Musk's XAI. He joined the Defense Department last May with a stake worth up to $1 million. By January 9th, he sold it for between $5 million and $25 million, a gain of up to 4,800% through his firm KQ partners, per-ethics filings. While holding that stock, Michael oversaw AI pushes at the Pentagon, including two deals with XAI. In July 2025, they picked Groc as a key AI provider. Then on December 22nd, right after getting a divestiture okay on December 18th, they aimed another agreement for XAI tech across three. Million personnel. Ethics experts are raising eyebrows. Former White House lawyer Richard Painter called it weird, saying no solid ethics advisor would let an official keep AI stock amid these negotiations. Central rules ban actions that boost personal finances, and this timing looks risky.

1:01The Pentagon, now dubbing itself the Department of War, insists Michael followed all rules with four disclosures and no conflicts. Spokesperson Sean Parnell says their ethics checks are ironclad. Michael's no stranger to tech. He ran business at Uber and knows Musk socially. As AI hype ramps up under Secretary Pete Hexf, this windfall spotlights how personal ties and rapid deals could blur lines in the military's AI. Rush, you've been listening to Adelaide News today, AI-powered local news.