Ex-Government Operatives Turn AI Startup into a Controversial Venture

In a bold move, Nate Cavanaugh and Justin Fox, once operatives of the Department of Government Efficiency (DOGE), have announced their latest initiative: an AI company named Special. With backing from Andreessen Horowitz and other notable figures like Elon Musk's ally Steve Davis, this startup has already stirred the pot. Cavanaugh and Fox are likening their venture to DOGE, but for the private sector.

Past Controversies Resurface

Earlier this year, the pair found themselves in hot water when the American Historical Association released hours of legal depositions related to a lawsuit against them. The lawsuit involved the mass termination of over 1,400 grants at the National Endowment of the Humanities. Fox, a defendant alongside Cavanaugh, used AI, specifically ChatGPT, to decide which grants to cancel based on diversity, equity, and inclusion criteria. This mass cancellation was later deemed unconstitutional by U.S. District Judge Colleen McMahon, highlighting a classic instance of viewpoint discrimination.

Special's Ambitious Vision

Undeterred by their past, Cavanaugh and Fox are now channeling their focus on Special's operating system. They aim to automate manual tasks within critical service sectors, beginning with healthcare. Their first vertical, Figure Health, targets routine processes like patient intake and billing. A Texas-based acquisition is reportedly in the pipeline, though Special has kept further details under wraps.

Their strategy? Vertical integration. By acquiring companies and embedding their operating model, they're attempting to create a easy workflow. But one can't help but question: Will these former operatives' controversial methods cast a shadow over their new venture?

The Wider Impact

Alongside Cavanaugh and Fox, several former DOGE members are rallying behind Special, including Antonio Gracias and Anthony Armstrong. Venture capital firm BANNER VC and Human Capital's co-founder Baris Akis are also in the mix. Support from industry heavyweights like Coinbase CEO Brian Armstrong and Palantir's CTO Shyam Sankar adds an extra layer of intrigue.

The promotional video for Special draws inspiration from various cultural icons, including Elon Musk and former President Donald Trump, setting a backdrop of ambition and perhaps hubris. Yet, as Cavanaugh candidly admits in a deposition, despite their efforts, DOGE didn't reduce the federal deficit. The real question is whether Special will succeed where DOGE failed in delivering tangible results.