Ex-DOGE Employees Raise $130 Mill for AI National Security Startup

Gavin Kliger, Luke Farritor, and Jack Stein, three of the young engineers who helped take an axe to the federal workforce last year, are raising $130 million for a new AI start-up backed by venture capital firms Andreessen Horowitz and Sequoia Capital, according to several sources with knowledge of the funding round. The company will focus on using AI to secure government systems against national security threats, one source said. The trio plans to use other companies’ AI models rather than build their own. (The founders did not respond to requests for comment.) Kliger, who was until recently the chief data officer at the Pentagon, felt a sense of urgency after seeing that the powerful capabilities of Anthropic’s model Mythos could reportedly be used to hack into critical systems, according to a source who spoke with the founder. “Being there during that moment was like, Oh shit, we were just not prepared for what’s happening with AI,” the person said. They aren’t the only ex-DOGE employees looking for a cut of the $1 trillion defense budget. Ethan Shaotran, another early DOGE recruit, recently founded Blitz Industries, a defense start-up reportedly registered to an address across the road from a SpaceX office in Hawthorne, California. Meanwhile, other Musk acolytes have headed to existing defense contractors or started “America First” venture funds like Banner VC. In some ways, DOGE acted as an expedited revolving door, giving the young engineers brief, chaotic experience across multiple government agencies, before spitting them back into the Valley, which is chock-full of investors itching to get in on government-adjacent technology. Their experience—plus the tantalizing promise that these companies will be Musk-approved—has put DOGE founders at the top of some investors’ wish lists. Investors poured a record $49.1 billion into defense tech last year, with the Trump administration boosting defense spending and looking to do business with smaller defense contractors. And the burgeoning DOGE-to-contractor pipeline is evidence that, while DOGE’s influence in government has waned, the movement isn’t really over; in fact, it has spawned a new generation of government-facing founders backed by tech’s most powerful libertarian and right-wing figures. When we called up three investor sources to ask if they’d heard about Kliger’s start-up, all spent the next week trying to get into the financing round. “Bummer,” one texted us when he wasn’t able to reach Kliger; “Thank you so much,” another told us, grateful, he said, to just be informed of the start-up. They didn’t even need to know details about the company to get excited. DOGE as a credential was enough to spark FOMO. But as investors salivate, watchdogs sweat. Craig Holman, an expert in governmental ethics at Public Citizen, said that revolving-door regulations are weak enough as it is. “For these folks, there’s essentially no ethics restrictions,” he said, “and they’re making use of it.” In a since deleted 2024 Substack post, Kliger Kliger lauded Defense Secretary Pete Hegseth, a former Fox News host, as an outsider who “represents a direct challenge to the entrenched power brokers who have spent decades turning the Pentagon into a revolving door for defense contractors and corporate lobbyists.” He also wrote that disgraced former congressman Matt Gaetz, who was accused in a House Ethics Committee report of statutory rape, was a victim of the “deep state.” (Gaetz has repeatedly denied any wrongdoing.) In government, Kliger earned a reputation for being brash and demanding, one former colleague said. At the Consumer Financial Protection Bureau, he carried out mass firings with such intensity that he “kept the team up for 36 hours straight to ensure that the notices would go out yesterday,” a government employee said in a declaration filed as part of a court case. “Gavin was screaming at people he did not believe were working fast enough to ensure they could go out on this compressed timeline, calling them incompetent,” the employee continued in the declaration. To some at the Pentagon, where Kliger eventually landed after stints at a handful of agencies, DOGE seemed to have unlimited power. “If DOGE emailed you, the answer was yes; there was zero conversation,” another former Pentagon employee said. Many longtime staffers bristled at the intrusion. Still, others marveled at how Kliger was able to slice through bureaucracy to get things done quickly, one former Pentagon employee said. Kliger worked on an effort to broker $200 million contracts with companies including OpenAI, Google, and Anthropic, and on setting up GenAI.mil, a platform that government employees use to access AI models from these companies, the person said. Early this year, the Pentagon went head-to-head with Anthropic after the company said it did not want its models used for surveillance of Americans or for fully autonomous lethal weapons. As the two sides tried to reach an agreement, Kliger was copied on an email from Emil Michael, the under secretary of war for research and engineering, to Anthropic CEO Dario Amodei. Not long afterward, the Pentagon publicly announced that Kliger had been promoted to the agency’s chief data officer. The move earned the ultimate Silicon Valley stamp of approval: “Superb selection,” Marc Andreessen tweeted. In April, Anthropic reportedly gave certain government agencies a preview of Mythos. According to Kliger’s LinkedIn, he left the government that same month. When former DOGE employees Nate Cavanaugh and Justin Fox recently decided to start an AI company, they looked to their DOGE team for seed funding, a person with direct knowledge said. They approached Steve Davis, DOGE’s operational head and a longtime Musk deputy. “It was just natural to go to the leadership team at DOGE first,” the source said. This month, Cavanaugh and Fox—who went viral for DOGE case depositions in which they defended cutting jobs and struggled to define DEI—announced Special.co, a start-up that will initially aim to buy businesses that receive government funding, like Medicare, and make them more efficient with AI. Their investors are a who’s who of the Musk-verse, including Davis, Andreessen Horowitz, and Human Capital, the firm of DOGE headhunter Baris Akis. But other investors are wary. To bet on DOGE is to bet on a distinctly MAGA brand, one defense executive we spoke to said, and some investors are curious about just how ideologically entrenched these guys are—and whether they will be able to pivot if the Republicans lose Congress in the midterms or lose the presidency in 2028. A bigger issue is the legal challenges these start-ups may face. One investor with ties to the administration said that, while it may seem like a no-brainer to back founders who have worked with Donald Trump, their time in DOGE might hinder the companies’ ability to win contracts. “There’s actually such a concern about conflict of interest that it could make it harder,” he said. Kliger’s company, with its focus on government systems, will be looking to sell technology back to his former agency. A Department of Defense official said that Kliger, as a former senior employee, is subject to the agency’s one-year “cooling off” period, among other rules. That means he cannot try to influence his former colleagues in that time—although other people at his start-up can. It’s unclear how invested the Trump administration is in cracking down on potential conflicts of interest. Last February, for example, Trump fired David Huitema, the head of the United States Office of Government Ethics—the agency responsible for preventing conflicts of interest and ethical violations in government. Since then, no full-time replacement has been appointed, sending the message that “no one is minding the store,” said Greg Williams, a defense-spending expert at the Project on Government Oversight, a nonpartisan watchdog. (A government official said in response that the White House was actively interviewing candidates.) The legal murkiness could be a boon for the DOGE crew, who got a front-row seat to the strategies and direction of the very agencies to which they may now be trying to sell. Kliger, for instance, spent the tail end of his stint at the Pentagon working on a centralized platform to host autonomous technology for the agency, according to a former Pentagon employee. The project, which is known as Autonomy.mil, is still in its early stages—but, the person said, it will likely have a budget to contract with AI defense start-ups.