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The Pentagon’s private sector A-Team

This morning, before the meeting between the Secretaries of Defense Pat Hegseth and Anthropic CEO Dario Amoudimy colleague Hadenfield and I published a story about the Pentagon’s hardball contract renegotiation with Anthropic. The stakes are reasonably high, with the Pentagon continuing to label Anthropic a “supply chain risk” if the company doesn’t comply with their demands about their acceptable use policy.

In a post-meeting readout, Axios reported. Hegseth brought in several other top defense officials The meeting appeared to show the Pentagon was taking the dispute “seriously.” But in a post-DOGE Trump administration run by broligarchs, it’s always worthwhile checking the attendees’ bios. Some of them were ordinary senior officials who had spent their careers in government and military work, but others had somewhat unusual backgrounds:

The presence of Feinberg and Michael should draw the eye. Yes, they both have some experience in the defense industry: Michael was a White House aide during the Obama administration, and spent two years as special assistant to Defense Secretary Robert Gates at the Pentagon, which is nothing. Feinberg has clearly spent time with defense contracts. But one has to fully appreciate the rogue business mentality that private sector types like to bring to government – especially with such high-level negotiations. Parnell’s presence, meanwhile, makes sense in the context of “being Pete Hegseth’s spokesperson.”

Single supplier shuffle

One topic Hayden and I didn’t need to explore further was the “single supplier vulnerability” issue, but it was turning into an important factor in the negotiations.

In 2024, the Biden administration released National Security Memorandum on the Use of Artificial Intelligencewhich issued several directives regarding supply chain protection. Among them was a directive for the Defense Department to maintain contracts with at least two Frontier AI labs that have been cleared to handle classified information, to prevent a scenario where a compromised vendor could take down entire IT systems. But as early as the summer of 2025, I’m told, the Trump administration was trying to address that threat. While he signed separate agreements with Anthropic, Google, xAI, and OpenAI, only Anthropic’s model was cleared for classified use when Hegseth published his memo outlining his new AI policy in January.

That puts the Pentagon in a tough spot: even if they successfully cut Anthropic and put every defense contractor through the difficult process of removing the cloud from their workflows, they risk falling out of compliance with the department’s own guidelines. (To avoid sole supplier risk a A very basic practice in the tech industry.)

It certainly gives more context to the Pentagon’s decision last night. Suddenly give xAI’s Grok access to classified systems.Although the Grok is considered the least capable of the models available. While The New York Times Reported With Google also close to signing a deal to allow the Pentagon to use Gemini for classified work, defense insiders see Gemini as a standard competitor to Cloud, while xAi’s Grok is “not considered as advanced or as reliable as Anthropics.” OpenAI is nowhere near a deal, as the company reportedly believes it should improve ChatGPT’s security features before deploying it on classified networks.

So let’s do the math. You have four AI models, and you need to work with two of them. Your choices are:

1) A company with a very good AI model and increasingly flexible ethos.

2) A company with The best AI model, but one that refuses to let you kill people autonomously without human input.

3) A company whose AI model is not yet secure enough to deploy.

4) A company whose AI has racist delusions and produces child porn, and which you don’t consider “modern” [or] reliable”

If you can’t deal with Companies 2 and 3, you’re stuck with Companies 1 and 4, which even defense officials admit is not good from a national security perspective. “There’s only one reason we’re still talking to these people. [Anthropic] Do we need them and we need them now. The problem for these guys is that they’re so good.” A defense official said Axis Before the meeting.

Last week’s latest Clarity Act discussions between finance and crypto inadvertently turned into the latest installment of a recurring segment I’m now calling: “Why Laura Loomer Tweeting about obscure deep-cut tech issues as if they were MAGA loyalty tests?

Last Thursday, a small group of powerful crypto and finance players met at the White House to continue hashing out draft language on stablecoin production. Coinbase, which sparked the talks after withdrawing support from Clarity over stablecoin production, was in attendance. However, before the meeting Loomer tweeted a classic banger. Which demonstrated the tactics she uses to influence Trump: Cast the target as someone who once supported Trump’s enemies and is therefore disloyal.

Ironically, Coinbase has become one of the Trump administration’s biggest branded boosters, following its pet initiatives and His logo was even splashed in last year’s military parade..

Although Loomer tweeted similar sentiments about Coinbase last June.doesn’t seem to have any bearing on whether Coinbase has access to Trump, and likely won’t for a while: I’m told the CEO Brian Armstrong Loomer was at Mar-a-Lago the day before he tweeted, while attending a World Liberty Financial event.

A wild Trump World character has appeared!

If you followed the story of Logan Paul Its auction Pokemon By collecting cards, you will know that one of these cards It sold last week for a record-setting $16.5 million.. But who is he? Pokemon Buyer? This is AJ Scaramuccianother only son Anthony ScaramucciNew York financier and former Trump ally who famously served 10 days as Trump’s White House communications director in 2017.

AJ is the founder of Solari Capital, who Invested $100 million in Bitcoin mining platform. Eric Trump. He also now owns the Pikachu Illustrator card, one of only 39 cards in existence and in Grade 10 condition, as well as the diamond chain and carrying case that Paul wore to display the card. He appeared WrestleMania 38. Scaramucci told reporters He bought this card as part of his upcoming “Planetary Treasure Hunt”. He also hopes to buy one, he added. T rex The Skull and the Declaration of Independence. (He later posted on X. that he hoped to place the card in the Nintendo Museum in Kyoto and “cement it as the ‘Mona Lisa’ of the Pokémon franchise.”

We cannot believe that the court will tell you that, Much less than the Southern District of New York: If you put correspondence between you and your attorney into a publicly available AI platform, it will no longer be protected by attorney-client privilege and will be subject to discovery!!!!

In any case, have a happy State of the Union watch party (if anyone does that now) and see you next week.