Greetings and a cordial reception to Regulator, a periodical tailored for Verge subscribers, which delves into the activities of broligarchs, prominent figures, and the (potentially sentient) artificial intelligence systems contending for influence in Washington. Should you not yet be a subscriber, affirm your human essence in defiance of mechanical intentions by enrolling here.
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The Department of Defense’s elite private-sector unit
Earlier today, prior to an encounter involving Defense Secretary Pete Hegseth and Anthropic CEO Dario Amodei, my associate Hayden Field and I released an article detailing the Department of Defense’s aggressive contract re-negotiations concerning Anthropic. The implications are more significant than rationally warranted, as the Pentagon persists in labeling Anthropic a “supply-chain vulnerability” should the firm fail to adhere to its stipulations regarding their acceptable usage guidelines.
According to a summary issued after the meeting, Axios indicated that Hegseth convened several other high-ranking Defense personnel for the discussion, aiming to demonstrate the Department of Defense’s earnest approach to the disagreement. Nevertheless, within a post-DOGE Trump administration steered by broligarchs, scrutinizing the professional histories of those present consistently proves prudent. While some were typical senior functionaries who had dedicated their professional lives to governmental and military service, others possessed rather unconventional pasts:
- The Chief Technology Officer for the Department of Defense, Emil Michael, whom we indicated has been directing discussions with Anthropic. Michael might be recognized by veteran Verge readers and observers of Silicon Valley corporate sagas as Uber’s erstwhile second-in-command during Travis Kalanick’s tenure as CEO. He was ousted in 2017 following an inquiry that revealed he, alongside various other senior executives who self-identified as the “A-Team,” fostered an atmosphere of sexual harassment within the corporation.
- For those interested in his background concerning surveillance: At a 2014 dinner with numerous journalists, Michael proposed that Uber employ opposition researchers to accumulate damaging personal “intel” on reporters disseminating negative stories, implying a desire to single out a female journalist who had recently critiqued the company for its misogynistic environment. Concurrently, Uber attracted criticism for an internal utility termed “God Mode,” which staff utilized to monitor the whereabouts of its clientele, notably a BuzzFeed reporter who was investigating an Uber executive.
- Deputy Secretary Steve Feinberg, the originator of the private equity enterprise Cerberus Capital Management, which oversees approximately $65 billion in holdings and focuses on “troubled assets.” Feinberg, largely held responsible for the demise of the automobile producer Chrysler, furthermore demonstrated early backing for Donald Trump, contributing to his 2016 presidential election bid and participating on the president’s intelligence advisory committee in 2018. During his Senate confirmation hearing scheduled for 2025, Feinberg highlighted Cerberus’ financial commitments in various enterprises linked to national security, asserting his possession of “considerable familiarity with the Department of Defense as a vendor and comprehend[s] its operational structure and organization.”
- Back then, Democratic members voiced apprehensions that Feinberg might encounter conflicts of interest owing to Cerberus’ extensive financial stakes in defense contractors like DynCorp. (During that same year, DynCorp resolved a legal dispute with the Department of Justice regarding accusations of having “deliberately overcharged for subcontractor services under a State Department agreement for training Iraqi police forces.”)
- In 2023, while Feinberg remained affiliated with Cerberus, the company inaugurated Cerberus Ventures, a venture capital division dedicated to investing in nascent firms that tackle national security challenges within vital infrastructure.
- Sean Parnell, Hegseth’s principal media liaison, an Army veteran who, in 2021, sought to contend for an available Senate position in Pennsylvania. Although he secured Trump’s backing in the fervent Republican primary, he was compelled to withdraw in November following numerous claims of severe physical and psychological mistreatment made by his ex-wife during a custody proceeding. She was granted complete legal guardianship. (Dr. Mehmet Oz, currently holding a position in the Trump administration, thereafter obtained the nomination.)
The attendance of Feinberg and Michael warrants close scrutiny. Indeed, both possess a degree of background in the defense sector: Michael served as a White House fellow during the Obama era and dedicated two years as a special aide to Defense Secretary Robert Gates at the Department of Defense, a noteworthy credential. Feinberg has demonstrably engaged with defense agreements. Nonetheless, one ought to thoroughly grasp the acquisitive corporate mentality that individuals from the private sector are keen to introduce into public service — particularly during critical discussions of this nature. Parnell’s participation, conversely, aligns logically with his role as “Pete Hegseth’s representative.”
The sole-vendor dilemma
A subject Hayden and I were unable to delve deeper into was the matter of “sole-supplier susceptibility,” yet it is evolving into a pivotal element in the ongoing discussions.
During 2024, the Biden administration issued a national security directive concerning the deployment of artificial intelligence, outlining multiple mandates pertaining to the safeguarding of the supply network. Included within these were
was a mandate for the Department of Defense to uphold agreements with at least two cutting-edge AI research facilities authorized to process sensitive data, aiming to avert a situation where a single breached supplier could cripple an entire information technology infrastructure. However, by mid-2025, I’m informed, the Trump administration sought to tackle this weak point. While they had entered into distinct agreements with Anthropic, Google, xAI, and OpenAI, just Anthropic’s system gained approval for confidential use when Hegseth released his document detailing his updated AI strategy in January.
This predicament has left the Pentagon in a challenging position: Even if they successfully discontinue reliance on Anthropic and undertake the arduous process of compelling all defense contractors to cease using Claude in their operations, they would face non-adherence with the agency’s internal regulations, not to mention practical wisdom. (Preventing reliance on a sole provider is a fundamental procedure in the technology industry.)
It certainly sheds further light on the DoD’s recent choice last night to unexpectedly authorize xAI’s Grok entry to classified systems, even though Grok is generally perceived as the weakest performing of the existing systems. While The New York Times reported that Google is also nearing an agreement permitting the Pentagon to utilize Gemini for confidential tasks, military sector experts regard Gemini as a strong competitor to Claude, whereas xAi’s Grok “is not deemed as sophisticated or dependable as Anthropic’s.” OpenAI is far from reaching an accord, as the firm purportedly thinks it needs to enhance ChatGPT’s security attributes prior to implementing it on secure platforms.
So, let’s tally the options. You have four AI models, and you’re obligated to collaborate with two entities. The alternatives available are:
1) A company with a quite competent AI system and ever more adaptable ethical standards
2) A company with the superior AI system, but which declines permission for its utilization for lethally acting independently of human control
3) A company whose AI model lacks sufficient security for current implementation
4) A company whose AI has prejudiced fabrications and produces illicit content depicting minors, and that you do not deem “sophisticated [or] trustworthy”
If you cannot engage with companies 2 and 3, you’re left with no option but companies 1 and 4, which even Department of Defense personnel acknowledge is suboptimal for reasons of national defense. “The sole rationale for our ongoing discussions with these entities [Anthropic] is that their services are essential and urgently required. The challenge posed by these providers is their exceptional quality,” a Defense official told Axios ahead of the meeting.
The recent discussions regarding the Clarity Act involving the financial sector and cryptocurrency last week unintentionally evolved into the newest installment of an ongoing feature I’m now calling: “Why is Laura Loomer tweeting about lesser-known intricate technological matters as though they signify allegiance to MAGA?”
Last Thursday, a select assembly of influential cryptocurrency and financial figures convened at the White House to further refine preliminary wording concerning stablecoin returns. Coinbase, which initiated these discussions after it retracted its backing for Clarity regarding stablecoin earnings, participated in the gathering. Before the assembly, however, Loomer posted a characteristically impactful message that showcased her methods for exerting sway over Trump: Portraying the subject as a former ally of Trump’s adversaries, hence lacking fidelity.
Paradoxically, Coinbase has become a prominent corporate champion of the Trump administration, contributing funds to his favored projects and even displaying their emblem extensively throughout last year’s armed forces procession.
Though Loomer tweeted a comparable opinion about Coinbase last June, it seems to have exerted no effect on Coinbase’s rapport with Trump, and this is improbable to change soon: Word has it that Chief Executive Brian Armstrong visited Mar-a-Lago the day before Loomer tweeted, participating in a World Liberty Financial gathering.
An unexpected figure from Trumpworld has emerged!
If you kept track of the narrative of Logan Paul liquidating his Pokémon trading card assortment at auction, you might know that one of those cards fetched an unprecedented sum of $16.5 million last week. But who is the acquirer of this *Pokémon* item? It’s AJ Scaramucci, the son of the singular Anthony Scaramucci, the Big Apple financial expert and erstwhile Trump associate who notably held the position of Trump’s White House Communications Director in 2017 for 10 days.
AJ is the originator of Solari Capital, which allocated $100 million in a cryptocurrency mining operation overseen by Eric Trump. He also now possesses the Pikachu Illustrator card, one of merely 39 extant copies and rated as perfect condition, as well as the gem-studded necklace and protective container Paul utilized to exhibit the card when he made an appearance at WrestleMania 38. The younger Scaramucci
told journalists that he acquired the card in anticipation of his forthcoming “global quest for valuables,” further mentioning his desire to obtain a T. rex cranium and the Declaration of Independence. (Subsequently, he shared on X his aspiration to house the card within Kyoto’s Nintendo Museum, solidifying its status as “the ‘Mona Lisa’ of the Pokemon realm.”)
It is astonishing that a judicial body must convey this to you, let alone the Southern District of New York: Should you upload communications exchanged with your legal counsel onto an accessible artificial intelligence platform, its safeguard under attorney-client privilege is forfeited, and it subsequently becomes discoverable!!!!
Nevertheless, enjoy an agreeable observation gathering for the State of the Union address (should such gatherings still occur), and we will reconvene next week.