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The Pentagon’s private sector team
This morning, before a meeting between the Minister of Defense Pete Hegseth And Anthropic CEO Dario AmodeiMy colleague Hayden Field and I published a story about… Renegotiating the Pentagon’s stringent contract with Anthropic. The risks are higher than they reasonably should be, with the Pentagon continuing to classify Anthropic as a “supply chain risk” if the company does not comply with their AUP demands.
In the post-meeting readings, Axios mentioned this Hegseth brought in several other senior defense officials to the meeting in an attempt to show that the Pentagon is taking the dispute “seriously.” But in a post-DOGE Trump administration run by business leaders, it always pays to check the biographies of those in attendance. Some were ordinary high-ranking officials who spent their careers in government and military work, but others had somewhat unusual backgrounds:
- Pentagon CTO Emile Michaelwho we reported was leading the negotiations with Anthropic. Michael may be a long time familiar edge Readers and followers of Silicon Valley’s corporate drama as Uber’s former second-in-command when Travis Kalanick was CEO. Michael was fired in 2017 after an investigation found he and several other top executives were doing so They called themselves “Team A.” Perpetuating a culture of sexual harassment in the company.
- For anyone curious about his history of surveillance: During a dinner in 2014 with several journalistsMichael suggested that Uber hire opposition researchers to collect personal “dirt” on reporters who publish unfavorable stories, suggesting that he wanted to target a female reporter who had recently criticized the company for its culture of misogyny. This was also around the time when Uber courted controversy An internal tool known as “God Mode”, Which employees use to track the movements of its users, including one BuzzFeed A journalist was writing about an Uber executive.
- Deputy Secretary Steve Feinbergfounder of private equity firm Cerberus Capital Management, which manages approximately $65 billion in assets and specializes in “distressed real estate.” Feinberg, who is widely blamed Automaker Chrysler diesHe was also an early supporter of Donald Trump, donating to his 2016 presidential campaign and serving on the Presidential Intelligence Advisory Board in 2018. During his Senate confirmation hearing in 2025Feinberg praised Cerberus’ investments in several national security companies, saying it has “significant experience with the Pentagon as a contractor and understands how it works and is organized.”
- at that time, Democrats raised concerns That Feinberg would have a conflict of interest due to Cerberus’ numerous investments in defense companies such as DynCorp. (In that year, DynCorp settled a lawsuit with the Department of Justice Due to allegations that it “intentionally inflated subcontractor fees under a State Department contract to train Iraqi police forces.”
- In 2023, while Feinberg was still on Cerberus, The company launched Cerberus Venturesa venture capital arm that invests in early-stage companies that address national security issues in critical infrastructure.
- Hegseth’s spokesperson Sean Parnellan Army veteran who in 2021 tried to run for an open Senate seat in Pennsylvania. Although he won Trump’s endorsement in the heated Republican primaries, he was forced to withdraw from the study in November after his ex-wife submitted his resignation. Several allegations of serious physical and psychological abuse During the custody session. She obtained full legal custody. (Dr. Mehmet Ozwho now serves in the Trump administration, and subsequently won the nomination).
The presence of Feinberg and Michael should turn heads. Yes, they both have some degree of defense industry experience: Michael was a White House fellow during the Obama administration, and spent two years as a special assistant to Defense Secretary Robert Gates at the Pentagon, which is nothing. Feinberg clearly spent some time on defense contracts. But one must fully appreciate the predatory business mentality that the private sector likes to bring to government — especially under high-stakes negotiations like this. Meanwhile, Parnell’s presence makes sense in the context of “being the spokesperson for House Hegseth.”
Mix one resource
One topic that Hayden and I were not able to explore further was the issue of “single resource vulnerability,” but it became a critical factor in the negotiations.
In 2024, the Biden administration launched National Security Memorandum on the Use of Artificial Intelligencewhich has developed several directives on supply chain protection. Among them was a directive for the Department of Defense to maintain contracts with at least two frontier AI laboratories that were allowed to handle classified information, in order to prevent a scenario in which a single compromised vendor could destroy an entire IT system. But as early as the summer of 2025, I’m told the Trump administration was trying to address this vulnerability. Although they signed separate contracts with Anthropic, Google, xAI, and OpenAI, only Anthropic’s model was cleared for secret use when Hegseth published his memo outlining his new AI policy in January.
This put the Pentagon in a difficult position: Even if they succeeded in excluding Anthropics and going through the arduous process of having every defense contractor exclude Claude from their workflow, they would risk not complying with the department’s own guidelines, let alone common sense. (Avoiding the single-supplier loophole is… A very basic practice in the technology industry.)
It certainly provides more context to the Pentagon’s decision last night Grok suddenly grants the xAI access to secret systemsalthough the Grok is widely considered the least capable of the models available. while New York Times I mentioned Google is also close to signing a deal that would allow the Pentagon to use Gemini for classified work, and defense insiders see Gemini as a good competitor to Claude, while xAi’s Grok “is not considered as advanced or reliable as Anthropic.” OpenAI is not close to reaching a deal, as the company reportedly believes it must improve ChatGPT’s security features before deploying it on underground networks.
So let’s do the math. You have four AI models, and you are asked to work with two of them. Your choices are:
1) A company with a very good AI model and increasingly flexible ethics
2) A self-employed company better An AI model, but refuses to let you use it to kill people autonomously without human intervention
3) A company whose AI model is not yet considered secure enough to deploy
4) A company with an AI that has racist hallucinations and produces child pornography, which it does not consider “advanced (or) reliable.”
If you can’t contract with Companies 2 and 3, you’re stuck with Companies 1 and 4, which defense officials acknowledge is not optimal from a national security perspective. “The only reason we are still talking to these people (the Anthropists) is because we need them and we need them now. The problem with these people is that they are only so good.” A defense official said Axios Before the meeting.
The latest Clarity Act negotiation between finance and crypto last week inadvertently turned into the latest episode of a recurring segment I now call: “Why? Laura Lemire Tweeting about obscure deep tech issues as if they were MAGA loyalty tests?
Last Thursday, a small group of powerful players in the cryptocurrency and finance space met at the White House to continue drafting a draft on stablecoin returns. Coinbase, which sparked these negotiations after it withdrew its support from Clarity over stablecoin revenues, was present. But before the meeting, Loomer tweeted a classic song It demonstrated the tactics she is using to exert influence over Trump: portraying the target as someone who has previously supported Trump’s enemies and is therefore disloyal.
Ironically, Coinbase has turned into one of the Trump administration’s biggest brand supporters, donating money to his favorite initiatives and… Their logo was even spread throughout last year’s military parade.
Although Loomer tweeted similar sentiments about Coinbase last JuneIt appears to have had no impact on whether Coinbase has access to Trump, and likely won’t for a while: I’m told the CEO Brian Armstrong He was at Mar-a-Lago the day before Loomer’s tweet, attending a World Liberty Financial event.
The wild Trumpworld character has appeared!
If you follow the saga Logan Paul Sell it at auction Pokemon Collecting cards, you probably know that one of those cards It sold for a record $16.5 million last week. But who is this? Pokemon the buyer? that it Scaramucci tooThe one and only son Anthony Scaramuccithe New York financier and former Trump ally who served as White House communications director under Trump in 2017 for 10 days.
AJ is the founder of Solari Capital, which It invested $100 million in the Bitcoin mining platform it operates Eric Trump. He also now owns the Pikachu Illustrator card, one of only 39 cards in existence and in 10th grade condition, as well as the diamond chain and carrying case that Paul wore to display the card when appeared in Wrestlemania 38. Scaramucci told reporters He purchased the card as part of an upcoming “Planetary Treasure Hunt.” Adding that he also hopes to buy A T-Rex The skull and the Declaration of Independence. (It was later published on X He hopes to place the card in the Nintendo Museum in Kyoto and cement it as the “Mona Lisa” of the Pokemon franchise.)
We can’t believe the court has to tell you this, Not to mention the Southern District of New York: If you place correspondence between you and your lawyer in a publicly available AI platform, it is no longer protected by attorney-client privilege and becomes subject to discovery!!!!
Anyway, enjoy your State of the Union viewing party (if anyone does that anymore) and see you next week.
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