Financial disclosure documents show that Emil Michael, Under Secretary of Defense for Research and Engineering and Chief Technology Officer, sold his shares in Perplexity in June, with the transaction value ranging from $5 million to $25 million. This sale occurred weeks after he joined the Trump administration, once again drawing attention to his multiple exits from AI-related assets this year.
Within the year, multiple AI-related holdings have been divested.
Public records show that Michael served on the advisory board of Perplexity before entering government and stepped down in early 2025. In addition to Perplexity, he also sold his shares in xAI this year. Disclosures indicate that the xAI transaction was completed in January, with the sale amount falling within the same range of $5 million to $25 million.
The report also noted that Michael sold at least $5 million worth of Brex shares in April. Based on current disclosures, Perplexity, xAI, and Brex now constitute his three major tech-related exits this year.
xAI trading times have drawn attention
Disclosure documents show that the U.S. Office of Government Ethics issued Michael a waiver for the disposal of his xAI shares on December 18 of last year. Several days later, the Pentagon signed a new cooperation agreement with xAI to deploy Grok on classified networks. Michael completed the sale on January 9.
In addition, before joining the government, he received a personal loan of $250,000 to $500,000 from Perplexity at an interest rate of 4.57%. His ethics agreement states that he will not profit from unvested Perplexity shares, but existing disclosure documents do not specify whether the shares sold in June were vested, unvested, or both.
Controversy intensifies amid Anthropic ban
At the time these documents were disclosed, Michael was also one of the key public figures advocating for the Pentagon’s restrictions on Anthropic. Anthropic, along with Perplexity and xAI, is an AI model provider competing for federal government contracts.
The Trump administration ordered federal agencies to cease using Anthropic’s technology in February. Subsequently, the Pentagon classified the company as a “supply chain risk,” restricting military contractors from doing business with it. However, U.S. District Judge Rita Lin ruled last week that this designation constituted illegal retaliation, vacated the designation, and issued a permanent injunction.
Before the court made its ruling, the Pentagon contract originally awarded to Anthropic was taken over by OpenAI. Meanwhile, the Department of Defense also signed classified network-related agreements with seven other AI companies, including xAI.
Ethical review continues to face external scrutiny.
Some ethics experts have questioned the above timeline. Richard Painter, a former White House ethics lawyer who served in the Bush administration, stated that Michael should have sold all his financial interests in related companies before taking office.
The Pentagon responded that Michael and other defense officials "fully complied with ethical laws and regulatory requirements" and noted that the department has multiple layers of review processes in place.
Additional information: Perplexity is currently negotiating a new funding round with Nvidia, with reports suggesting its valuation could exceed $30 billion, up from approximately $20 billion in September 2025.