Key facts
- Emil Michael, Pentagon undersecretary of defense for research and engineering, sold his Perplexity AI stake in June.
- The sale generated between $5 million and $25 million.
- This is Michael's third AI-related stock sale this year, following exits from xAI and Brex.
- Michael previously served on Perplexity's advisory board.
- The Pentagon had previously blacklisted Anthropic, a competitor to Perplexity and xAI, but a judge vacated the designation.
Emil Michael, the Pentagon's undersecretary of defense for research and engineering, sold his stake in Perplexity AI in June for between $5 million and $25 million, according to financial disclosures. This marks his third significant AI-adjacent stock exit this year, following a substantial gain on his xAI stake and a sale of Brex stock.
Michael previously sat on Perplexity's advisory board and stepped down before joining the Trump administration. His disclosures reveal he also held a stake in Elon Musk's xAI, which he sold in January for between $5 million and $25 million, representing a gain of up to 4,800%. The timing of the xAI sale occurred shortly after the Pentagon signed a new agreement to deploy xAI's Grok on its classified networks, despite Michael receiving a divestiture certificate for the holdings days earlier.
Before entering government service, Michael received a personal loan from Perplexity. Ethics specialists have raised concerns about the timing of these sales. Richard Painter, a former White House ethics lawyer, stated that Michael should have divested his interests before joining the government. A Pentagon spokesperson, however, asserted that Michael and other defense officials are in full compliance with ethics laws and regulations.
The disclosures come as Michael has been a prominent figure in the Pentagon's efforts to blacklist Anthropic, a competitor to Perplexity and xAI. The Pentagon had barred military contractors from doing business with Anthropic, citing it as a 'supply chain risk.' However, a federal judge recently vacated this designation, ruling it was an illegal retaliation. OpenAI has since taken over a Pentagon contract that was initially intended for Anthropic.