Emil Michael, the Department of Defense’s Chief Technology Officer and Under Secretary of Defense for Research and Engineering, argued that the U.S. government should not buy equity in AI companies or add regulations that could slow the industry. He said close cooperation between AI firms and politicians on regulation could produce rules that favor established companies, limit future competitors and impede rapid development. The Pentagon is expanding commercial AI across classified networks through work with OpenAI, Google, xAI, Nvidia and Microsoft, while Anthropic has been sidelined over disputes reportedly focused on its model guardrails (built-in safety constraints). The department has consolidated innovation offices under Michael as part of procurement reforms under Defense Secretary Hegseth, with applied AI ranked first among six critical technology areas. GenAI.mil, the Pentagon’s internal generative AI platform, had reached 1.5 million personnel by mid-2026. The Pentagon has made a strategic exception for equity investments when supply-chain vulnerabilities require them, including a 15% stake in MP Materials valued at $400 million. Michael’s position is that AI companies do not create the same dependency risk as critical-mineral suppliers. The resulting vendor consolidation favors firms with classified-network access and mature products, while the scale of GenAI.mil could create substantial switching costs and long-term institutional lock-in.