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The Pentagon’s Private Sector A-Team
This morning before the meeting between the Defense Secretaries pete hegseth and Anthropic CEO Dario AmodeiMy colleague Hayden Fields and I published a story about the Pentagon’s renegotiation of its hardball contract with Anthropic. The stakes are higher than they should reasonably be if the Pentagon continues to designate Anthropic as a “supply-chain risk” if the company does not comply with their demands regarding their acceptable use policy.
In a later account of the meeting, Axios reported that Hegseth brought several other senior defense officials to the meeting in an effort to show that the Pentagon was taking the controversy “seriously.” But DOGE being run by brokers After the Trump administration, it is always worthwhile to check the bios of the attendees. Some of them were ordinary senior officers who had spent their careers in government and military work, but others had somewhat unusual backgrounds:
- Pentagon CTO emil michaelWho we reported is leading talks with Anthropic. Michael may have known for a long time the verge Readers and followers of Silicon Valley corporate drama as the former second-in-command of Uber when Travis Kalanick was CEO. Michael was ousted in 2017 after an investigation found that he and several other top executives, who called themselves the “A-Team”, perpetuated a culture of sexual harassment at the company.
- For anyone curious about his history on surveillance: During a dinner with several journalists in 2014, Michael suggested that Uber hire opposition researchers to gather personal “dirt” on journalists who publish unfavorable news, suggesting that he wanted to target a female reporter who had recently criticized the company for its culture of misogyny. This was the time when Uber sparked controversy for an internal tool called “God Mode” that employees used to track the activities of its users, including one. buzzfeed Journalist who was writing about an Uber executive.
- Deputy Secretary Steve FeinbergFounder of private equity firm Cerberus Capital Management, which manages approximately $65 billion of assets and specializes in “distressed assets.” Feinberg, who is widely blamed for the demise of auto maker Chrysler, was also an early supporter of Donald Trump, donating to his 2016 presidential campaign and serving on the president’s intelligence advisory board in 2018. During his 2025 Senate confirmation hearing, Feinberg spoke about Cerberus’ investments in several companies involved in national security, saying he has “significant experience and understanding with the Pentagon as a contractor”.[s] How it works and is organized.”
- At the time, Democrats raised concerns that Feinberg would have a conflict of interest due to Cerberus’s numerous investments in defense companies such as DynCorp. (That year, DynCorp settled a lawsuit with the Justice Department over allegations that it “knowingly inflated the charges against a subcontractor under a State Department contract to train Iraqi police forces.”)
- In 2023, while Feinberg was still at Cerberus, the firm launched Cerberus Ventures, a venture capital arm that invests in early-stage companies that address national security issues in critical infrastructure.
- Hegseth’s chief spokesperson, shaun parnellAn Army veteran who attempted to run for an open Senate seat in Pennsylvania in 2021. While he won Trump’s endorsement in the hotly contested Republican primary, he was forced to drop out in November after his ex-wife made multiple allegations of serious physical and psychological abuse during a custody hearing. He was granted full legal custody. (Dr. Mehmet Ozwho now serves in the Trump administration, later won the nomination.)
The presence of Feinberg and Michael should attract everyone’s attention. Yes, they both have some amount of defense industry experience: Michael was a White House Fellow during the Obama administration, and he spent two years at the Pentagon as a special assistant to Defense Secretary Robert Gates, which is nothing. Feinberg has clearly spent time with defense contracts. But one must fully appreciate the greedy business mentality that people in the private sector like to bring to government – especially with high-stakes negotiations like this. Parnell’s presence, meanwhile, makes sense in the context of “being Pete Hegseth’s spokesperson”.
single-supplier shuffle
One topic that Hayden and I didn’t get a chance to delve into more was the “single-supplier vulnerability” issue, but it is becoming an important factor in the conversation.
In 2024, the Biden administration issued a national security memorandum on the use of artificial intelligence, which provided several directives regarding supply chain security. Among them was a directive for the Defense Department to maintain contracts with at least two frontier AI laboratories that were cleared to handle classified information, to prevent a scenario where a compromised vendor could take down an entire IT system. But I’m told the Trump administration was trying to address that vulnerability as early as the summer of 2025. While he had signed separate contracts with Anthropic, Google, XAI, and OpenAI, only Anthropic’s models were cleared for classified use when Hegseth published his memo outlining his new AI policy in January.
This has put the Pentagon in a difficult position: Even if they successfully remove Anthropic and make every defense contractor go through the difficult process of removing the cloud from their workflow, they would risk falling out of compliance with the department’s own guidelines, to say nothing of common sense. (Avoiding single-supplier vulnerabilities is a very basic practice in the tech industry.)
This certainly provides more context to the Pentagon’s decision last night to suddenly give XAI’s Grok access to classified systems, even though the Grok is widely considered the least capable of the models available. Whereas the new York Times The report states that Google is close to signing a deal allowing the Pentagon to use Gemini for classified tasks, Defense insiders see Gemini as a quality rival to the cloud, while xAi’s Grok is “not considered as advanced or reliable as Anthropic.” OpenAI is no closer to a deal, as the company reportedly believes it needs to improve ChatGPT’s security features before it can be deployed on classified networks.
So let’s do the math. You have four AI models, and you have to work with two of them. Your choices are:
1) A company with a very good AI model and increasingly flexible ethics
2) with a company Best AI model, but which forbids you from using it to kill people autonomously without human input
3) A company whose AI model is not yet safe enough to deploy
4) A company whose AI has racist hallucinations and produces child porn, and which you don’t consider “advanced” [or] reliable”
If you can’t contract with Companies 2 and 3, you’re stuck with Companies 1 and 4, which even defense officials acknowledge is suboptimal from a national security perspective. “That’s the only reason we’re still talking to these people [Anthropic] Do we need them and we need them now. The problem for these guys is that they’re so nice,” said a defense official Axios Before the meeting.
Last week the latest Clarity Act talks between finance and crypto inadvertently turned into the latest episode of the recurring segment I’m now calling: “Why Laura Loomer Tweeting about obscure technical issues as if they were MAGA loyalty tests?
Last Thursday, a small group of powerful crypto and finance players met at the White House to continue drafting language on stablecoin yields. Coinbase, which initiated these talks after withdrawing support from Clarity over stablecoin yields, was in attendance. However, before the meeting, Loomer tweeted a classic banger, demonstrating the strategy she uses to influence Trump: Cast the target as someone who once supported Trump’s enemies and is therefore disloyal.
Ironically, Coinbase has become one of the Trump administration’s biggest branded boosters, donating money to his favorite initiatives and even having their logo printed in last year’s military parade.
Although Loomer tweeted a similar sentiment about Coinbase last June, it appears it had no impact on whether Coinbase has access to Trump, and likely won’t for some time: I’m told the CEO brian armstrong The day before Loomer tweeted, he was in Mar-a-Lago to attend a World Liberty Financial event.
A wild Trumpworld character has appeared!
If you have followed the saga of logan paul are auctioning it pokemon card collection, you may know that one of those cards sold for a record-setting $16.5 million last week. But who is he? pokemon Buyer? Its AJ Scaramuccison of only one anthony scaramucciNew York financier and former Trump ally who famously served as Trump’s White House communications director for 10 days in 2017.
AJ is the founder of Solari Capital, which invested $100 million in the Bitcoin mining platform Eric Trump. He now also has the Pikachu Illustrator card, one of only 39 cards in existence and in Grade 10 condition, as well as the diamond chain and carrying case that Paul wore to display the card when he appeared. wrestlemania 38. Scaramucci told reporters that he purchased the card as part of his upcoming “planetary treasure hunt”, adding that he also hoped to purchase a card. T. rex Skull and the Declaration of Independence. (He later posted on X that he hoped the card would be placed in the Nintendo Museum in Kyoto and cemented as “the ‘Mona Lisa’ of the Pokémon franchise.”)
We cannot believe that a court would have to tell you this, much less the Southern District of New York: If you put correspondence between you and your attorney into a publicly available AI platform, it is no longer protected by attorney-client privilege and becomes the subject of discovery!!!!
In any case, have a pleasant State of the Union watch party (if anyone does that anymore) and see you next week.
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