U.S. Secretary of Defense Pete Hegseth and Chairman of the Joint Chiefs of Staff Air Force General Dan Caine hold a press briefing in the Pentagon Press briefing room, following the announcement of a two-week ceasefire in the Iran war, at the Pentagon in Washington, D.C., U.S., April 8, 2026. REUTERS/Kevin Lamarque
An official in President Donald Trump's Department of Defense could be in legal jeopardy after he disclosed the murky sale of stock that he held in Elon Musk's artificial intelligence firm, according to a new report.
The Guardian reported on Thursday that Emil Michael, the undersecretary for research and engineering at the Pentagon, disclosed selling a position in Musk's xAI company, valued between $500,000 and $1 million, according to an ethics disclosure the outlet reviewed. Michael may have pocketed about $24 million in profit from the sale, according to the report.
Musk's xAI company is not publicly listed, and the Guardian notes that it is "unclear" how Musk sold the stock or who purchased it from him.
The report also notes that Michael appeared to be holding the stock during a time when the Pentagon was negotiating with xAI on a contract to become one of the agency's AI vendors.
"During the period that Michael owned the xAI stock the Pentagon announced two separate agreements with the firm," the report reads in part. "In July 2025 the Pentagon chose Grok as one of four commercial providers that would help the department utilize artificial intelligence."