Financial disclosures by a high-ranking Pentagon official have revealed interesting details about his ties to artificial intelligence. Emil Michael, who serves as the U.S. Deputy Secretary of Defense for Research and Engineering and is also the department's chief technology officer, liquidated his assets in the AI startup Perplexity in June of this year. The transaction is estimated to be worth between $5 million and $25 million.
This is not the first such move for Michael. Earlier this year, he also sold his stake in xAI, a company owned by Elon Musk, for a similar amount — up to $25 million. This sequence of actions raises questions about potential conflicts of interest, especially given the active integration of AI technologies in the U.S. defense sector.
Notably, before his appointment to the administration of Donald Trump, Michael was a member of Perplexity's advisory board. His transition to public service appears to be accompanied by a systematic divestment from private technology holdings, which is standard practice for high-ranking officials; however, the scale and nature of these deals warrant particular attention.
Interestingly, the stock sale comes amid the rapid growth in popularity of Perplexity as an AI-based search platform, as well as intensifying competition in this segment with giants such as Google and OpenAI. The timing of the deal may indicate that Michael sought to lock in profits at the peak of the company's valuation.
My analysis: Such steps by key figures in the defense department are a signal to the market. If an official of this level is systematically exiting AI assets, it could point to impending stricter regulation in the AI sector or a reassessment of how the state interacts with private technology companies. In any case, these deals deserve closer scrutiny.