US defense official overseeing AI reaped millions selling xAI stock after Pentagon entered agreement with company | US military
https://www.theguardian.com/us-news/2026/apr/09/pentagon-ai-xai-emil-michael
Publish Date: 2026-04-09 15:43:00
Source Domain: www.theguardian.com
A high-profile US defense department official who oversees the agency’s artificial intelligence efforts made a profit of up to $24m selling a private investment he held in Elon Musk’s AI company earlier this year, according to government ethics records released this month. The value of his stake totaled a maximum of a million dollars when he joined the department.
Emil Michael, who is the Pentagon’s under secretary for research and engineering under the Trump administration, oversees negotiations with AI companies and has been pushing the defense department to rapidly increase the widespread use of AI.
Michael declared in March 2025 that he had a position in xAI valued between $500,000 and $1m.
He sold those holdings on 9 January for between $5m and $25m, according to disclosures filed with the office of government ethics (OGE). He reported that he owned the xAI shares through a company called KQ Partners. (Government financial disclosure reports are designed to show ranges of holdings, rather than precise amounts.) The increase in value amounts to a gain of between 400% and 4,800%.
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.
During the period that Michael owned the xAI stock the Pentagon announced two separate agreements with the firm. In July 2025 the Pentagon chose Grok as one of four commercial providers that would help the department utilize artificial intelligence.
On 18 December, seven months into running the Pentagon’s research and engineering efforts, Michael received a divestiture certificate from the OGE that said he would sell his xAI stock to comply with conflict of interest laws.
Four days later, on 22 December, the defense department, which now refers to itself as the Department of War, announced a new agreement with xAI. “Today, the War Department officially entered into an agreement with xAI, paving the way for the…
