Meet Your New Defense Contractors: The DOGE Boys

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.