Pentagon's AI Policy Chief Sold Up to $50 Million in Stock While Overseeing Military AI Deals

Emil Michael runs the Pentagon's artificial intelligence agenda. He's also made tens of millions of dollars selling stock in AI companies while doing it.

According to financial disclosure records reviewed by The Guardian, Michael sold his stake in Perplexity, an AI-powered search engine, in June for somewhere between $5 million and $25 million. Federal ethics filings report values in broad ranges, not exact figures, so the precise number stays hidden. The Lever first reported in March that Michael held Perplexity stock.

This isn't his first big AI payday since joining the Trump administration.

The Guardian reported earlier this year that Michael sold his private stake in Elon Musk's xAI on January 9 for between $5 million and $25 million, a gain of 400% to 4,800% on a position he'd valued at $500,000 to $1 million just months earlier. He held those xAI shares through an entity called KQ Partners. xAI isn't publicly traded, so how Michael got the stake, how it was priced, or who bought it when he sold remain unclear from the disclosures.

The timeline on that sale deserves attention. The Pentagon picked Grok, xAI's chatbot, as one of four commercial AI providers in July 2025. Michael got a divestiture certificate from the Office of Government Ethics on December 18 ordering him to sell the xAI stock to comply with conflict-of-interest law. Four days later, on December 22, the Department of War announced a new agreement with xAI to deploy its technology on GenAI.mil. Michael didn't actually sell until January 9, more than two weeks after that new deal was announced.

Richard Painter, a former White House ethics lawyer under President George W. Bush, called federal law clear on this point: officials generally can't take government actions that benefit their own financial holdings. "It sounds pretty weird," Painter told The Guardian. "There is no way that a decent ethics lawyer would let a [defense department] official hold on to AI stock" while making decisions that touch that company.

On the Perplexity sale, Painter's complaint is simpler: Michael should have sold before he ever took the job. "He should have sold all interest in the company before he started working," Painter said. "That's the way we would have done it back when I was working for president." He added that Michael's ownership wasn't illegal on its face, but "most administrations would have said get out of that stock before you start that job."

Michael's Perplexity ties go beyond stock ownership. His 2025 disclosures show he took a personal loan from Perplexity of $250,000 to $500,000 at 4.57% interest a year before he sold the shares. He also sat on a Perplexity advisory board and says he stepped down once he entered federal service. Some of his Perplexity stock was vested, some wasn't, and his ethics agreement bars him from profiting on the unvested portion. The disclosures don't say which shares he actually sold. Perplexity landed a General Services Administration contract in November 2024, but nothing in the records ties that contract directly to the Pentagon.

Michael also sold his stake in Brex, a financial software company backed by Peter Thiel, for at least $5 million in April, after Capital One acquired the firm. He'd valued that same stake at a maximum of $750,000 in March 2025, putting his gain at 473% or higher. Michael had consulted for Brex before joining government. Brex has no known government contracts.

The Pentagon isn't backing down. A spokesperson told The Guardian that Michael and other defense officials "are in full compliance with ethics laws and regulations" and that "any claims otherwise are false," pointing to what the department calls "a rigorous, multi-layered ethics framework."

No investigation has been opened. No charges have been filed. Painter's criticism is about appearances and process, not a legal finding of wrongdoing, and he says the stock ownership itself likely wasn't unlawful.

But Michael isn't some mid-level analyst. He's the Pentagon's chief technology officer, the guy negotiating with AI vendors and pushing the department to adopt their products faster. When the man setting military AI policy is also personally profiting off the companies competing for that business, the optics raise serious questions.

Most of the coverage of this story, including pieces from Newsy Today, NewsBeep, We Got This Covered, and ICO Optics, simply repackages The Guardian's original reporting without adding new facts. The Guardian remains the sole outlet with direct access to the disclosure records. A central unanswered question: what exactly did Michael know about pending Pentagon-AI contracts when he decided when to sell, and will anyone in Congress ask him to explain the four-day gap between the xAI deal announcement and his eventual sale.