Who is Emil Michael? Pentagon Official Sold xAI Stake for $24M After Landing Defense Deal

Financial records made public this month show that Emil Michael, a leading figure in US military AI, walked away with a $24 million (£17.88 million) gain from selling his private shares in Elon Musk's tech firm.

This massive payday stands in stark contrast to the start of his tenure, when his interest in the company was valued at just $1 million (£0.75 million).

Who is Emil Michael?

In his role as the Pentagon's Under Secretary for Research and Engineering, Emil Michael manages the department's dealings with AI firms. He has been a primary force behind the Trump administration's efforts to speed up the integration of artificial intelligence across the military.

Before his current post, Michael served as a White House Fellow and acted as a Special Assistant to the Secretary of Defense, according to his official biography on the U.S. Department of War official website.

During that period, he led vital operations across Iraq, Pakistan, and Afghanistan while directing the 'tooth-to-tail' initiative to cut through red tape and redirect funds to frontline troops. These efforts eventually led to him receiving the Secretary of Defense Award for Outstanding Public Service.

Outside of his time in government, Michael has built an extensive career within the private sector. He played a key role in the growth of various high-profile firms, such as Uber Technologies, Tellme Networks, and D-Wave Systems. His professional history reflects a talent for spotting emerging tech trends and scaling businesses, with a personal investment portfolio that covers everything from quantum computing and fintech to consumer logistics and AI.

The xAI Windfall

In March 2025, Michael disclosed a stake in xAI worth between $500,000 (£372667.50) and $1 million (£0.75 million). According to Office of Government Ethics (OGE) filings, he offloaded these holdings on 9 January for a sum ranging from $5 million (£3.73 million) to $25 million (£18.63 million). He noted that the xAI shares were held through an entity called KQ Partners.

This rise in valuation represents a massive surge, with Michael's returns sitting somewhere between 400% and 4,800%. It is worth noting that Government financial disclosure reports are intended to provide broad brackets for investments rather than exact figures.

Questions Surround Musk's Private Firm

Because xAI—the company responsible for Musk's Grok chatbot—is not a public entity, there is no clear record of how Michael secured his stake, its valuation at the time, or the identity of the buyer. While Michael held these shares, the Pentagon went public with two distinct deals involving the firm. This included a decision in July 2025 where the department selected Grok as one of four commercial tools intended to help the military integrate artificial intelligence.

On December 18, seven months after taking charge of the Pentagon's research and engineering branch, Michael was issued a divestiture certificate by the OGE. This document stated he would offload his xAI holdings to ensure he remained in line with laws governing conflicts of interest.

Just four days afterwards, on December 22, the Defense Department—now operating as the Department of War—confirmed a further arrangement with xAI.

'Today, the War Department officially entered into an agreement with xAI, paving the way for the deployment of its advanced capabilities on GenAI.mil. This move builds on the rapid deployment of cutting‑edge AI across the Department's 3 million military and civilian personnel,' a press release confirmed. Ethics filings indicate that Michael waited until January 9 to finally part ways with his stake in xAI.

Legal Experts Raise Red Flags

Richard Painter, who served as a White House ethics attorney for President George W. Bush, noted that government officials generally commit a criminal offence if they take part in state actions that aid their personal finances. Regarding these specific dealings, he remarked, 'It sounds pretty weird.'

He further explained, 'There is no way that a decent ethics lawyer would let a [defense department] official hold on to AI stock while he's involved in AI matters. You would have a very high chance of violating the criminal statute.' Under the law, federal employees are strictly barred from using their positions to make decisions that line their own pockets.

The Pentagon ignored a series of specific questions, opting instead to issue a brief statement from spokesperson Sean Parnell. In the message, Parnell insisted that Michael remained 'in full compliance with all ethics laws and regulations. Any claims otherwise are false.'

A Public Clash With Contractors

Michael took his oath of office as the Pentagon's Under Secretary of Defense for Research and Engineering in May 2025.

Since then, he has spearheaded a very public row between the department and the AI developer Anthropic, triggered by the firm's refusal to let its tech be used for domestic spying or autonomous lethal operations.