Pentagon’s Biggest Champion of Blacklisting Anthropic Has a Few Million Reasons for His Stance

When the Pentagon attempted to strengthen Anthropic over the company’s refusal to allow its models to be used for domestic surveillance or the deployment of fully autonomous weapons, there were apparent standoffs behind the scenes with Defense Secretary Pete Hegseth, but public pressure to punish Anthropic came from Emil Michael, the Trump administration’s undersecretary of defense for research and engineering and the Pentagon’s chief technology officer. According to a report in The Lever, the push he took to ban AI firms from government transactions may have some ulterior motives.

A financial disclosure filed by Michael when he took over and was overseen by Leverage revealed that he owned “vested and non-vested stock” in Perplexity, an Anthropic rival, and that he also served on the company’s board. According to the filing, he owns $2-$10 million in Perplexity stock. While Perplexity doesn’t have a contract directly with the Defense Department, it signed an agreement last year to deploy its AI search engine across all federal agencies and is one of three companies being considered for approval to host government-provided AI systems on its servers.

Michael also had a stake in Tools for Humanity, run by Sam Altman, and worked as a consultant at Tools for Humanity, maker of an eye-scanning orb for human verification. It’s probably worth noting that Altman’s other company, OpenAI, is the one holding the Pentagon contract that Anthropic was forced to forfeit.

Michael’s involvement in the emerging tech industry isn’t really a surprise given his history. He was previously senior vice president of business and chief business officer at Uber, and served as founder Travis Kalanick’s right-hand man, until both were ousted by investors. Michael recently said he would “never forget…nor forgive” for ousting shareholders. The fact that Michael is a man who holds a grudge probably doesn’t give Anthropic much assurance in its quest to get its contract back.

This could lead to some complicated conversations in the future. On Tuesday, a judge overseeing one of the lawsuits filed by Anthropic against the Defense Department for allegedly retaliating against the company appeared to side with the AI ​​firm. U.S. District Judge Rita Lynn described the Pentagon’s decision to designate Anthropic as a supply chain risk as “an effort to cripple Anthropic.”

It is not that the Pentagon has distanced itself from Anthropic’s technology, despite all its posturing and allegations of it being a security threat. The Defense Department reportedly used Anthropic’s cloud in the early days of its attack on Iran, and it seems it has not distanced itself from AI despite its warnings about the technology.