Pentagon CTO Warns Against Government Stakes in AI Companies

The Department of Defense's chief technology officer, Emil Michael, stated Wednesday that the U.S. government should not pursue nationalization or partial ownership of artificial intelligence companies. Speaking to CNBC, Michael argued that direct government involvement would not be beneficial for the rapidly advancing sector.

Stance on Government Ownership

Michael cautioned against government intervention in the AI industry, where U.S. companies are among the largest global leaders. "We don't want government to get in the middle," he said, adding that nationalization "doesn't really go well" for such industries, according to the report.

The comments come as the Trump administration has previously taken direct stakes in private-sector companies. These actions include acquiring a reported 10% stake in Intel and a golden share in U.S. Steel.

Views on AI Regulation

Beyond ownership, Michael also expressed opposition to increased government regulatory oversight of AI companies. He highlighted the debate between pre-regulating the technology, similar to Europe's approach, and holding companies accountable for developing safe products before their release.

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While acknowledging that a recent hack of Hugging Face was concerning, he questioned what type of regulation could have prevented such an incident. Michael suggested that existing laws from the Federal Trade Commission would be enforced and that companies could voluntarily pause activities to resolve issues, rather than face broad mandates.

Market Implications

The CTO's position signals a preference for a free-market approach to AI development, a stance that could reduce investor uncertainty about direct government interference or dilution of equity in leading tech firms. Michael's comments aligned with President Trump's recent pushback against calls for an AI slowdown, which he reportedly described as a "hoax and scam."

Michael suggested there is a "coordinated campaign to create fear" that could lead to irrational decisions benefiting certain incumbent companies in the AI industry. He warned against placing complete trust in a few AI executives to self-regulate, indicating a complex balance between corporate responsibility and government policy.