Emil Michael (에밀 마이클), the U.S. Defense Department’s deputy undersecretary for research and engineering and chief technology officer, sold a stake in AI search startup Perplexity in June for $5 million to $25 million, worth about 6.8 billion to 34 billion won.

The Guardian reported on Tuesday, citing financial disclosures, that the sale was Michael’s third AI-related investment exit this year. Michael sold a stake in Elon Musk’s xAI in January for $5 million to $25 million and made a profit of up to $24 million. In April, he sold a stake in fintech company Brex to secure at least $5 million.

Michael served as a Perplexity adviser before joining the Trump administration and stepped down from the advisory board in early 2025. He later joined the Trump administration in May 2025 and was responsible for AI policy and procurement at the Defense Department.

The Perplexity sale has drawn attention because Michael has publicly played a key role this year in the Defense Department’s sanctions process against Anthropic. Anthropic competes with Perplexity and xAI and is vying for U.S. government AI contracts.

President Trump ordered on Feb. 27 that the federal government stop using Anthropic technology, and the Defense Department in March designated Anthropic as a "national security supply chain risk". That restricted contractors that do business with the U.S. military from engaging in commercial dealings with Anthropic. At the time, Michael was also involved in the process of assessing Anthropic’s supply chain risk.

Rita F. Lin (리타 F. 린), a judge at the U.S. District Court for the Northern District of California, ruled on the 27th of last month that the Defense Department’s supply chain risk designation for Anthropic violated relevant rules and amounted to retaliation for Anthropic’s disagreement with government policy. The court invalidated the measure and issued a permanent injunction.

Michael’s sale of his xAI stake also became controversial because of its timing. After receiving certification from the Office of Government Ethics to dispose of his xAI stake on Dec. 18, 2025, he made the sale on Jan. 9, 2026. In between, the Defense Department signed a new contract with xAI and later introduced xAI’s Grok into a military classified network. Michael’s xAI stake was reported at $500,000 to $1 million when he joined the government, while the sale price was $5 million to $25 million.

His financial ties with Perplexity were also cited as an ethics issue. According to 2025 financial disclosures, Michael took a personal loan from Perplexity of $250,000 to $500,000 at an annual interest rate of 4.57 percent before he joined the government. He pledged in an ethics agreement not to profit from Perplexity stakes that were not yet finalized, but public documents do not show whether the June sale involved finalized stakes or included unfinalized stakes.

Richard Painter (리처드 페인터), a former White House ethics lawyer in the George W. Bush (조지 W. 부시) administration, pointed out that Michael should have disposed of all related stakes before starting public service. A Defense Department spokesperson, however, said Michael and other defense officials are complying with ethics laws and regulations and have undergone a multi-layered ethics review process.

Perplexity is in talks with Nvidia (엔비디아) to raise new investment, and if negotiations succeed, its corporate value is expected to exceed $30 billion, or about 40.8 trillion won. That would be more than 50 percent higher than the $20 billion valuation it received in September 2025, or about 27.2 trillion won.

The stake sales are fueling controversy over possible conflicts of interest because a senior official in charge of the U.S. Defense Department’s AI procurement held or disposed of stakes in AI companies competing for government contracts. Still, based on disclosed materials alone, it is difficult to conclude that there was a direct causal relationship between Michael’s stake sales and specific Defense Department contract decisions.