Why DOGE Is Doubling Down on Its AI Potential
Editor's note: Disarray in Washington D.C. won't stop the artificial intelligence ("AI") boom...
Elon Musk's lofty ambitions for implementing cutting-edge AI in the Department of Government Efficiency have faced scrutiny amid an ongoing audit of its fundamental functions... putting the government's plans for AI growth in question.
But according to Joel Litman – chief investment officer for our corporate affiliate Altimetry – this audit could help open up huge moneymaking opportunities in a small group of stocks.
In today's Masters Series, adapted from the February 19 and April 22 issues of the free Altimetry Daily Authority e-letter, Joel explains why Musk remains confident in the government's AI capabilities...
Why DOGE Is Doubling Down on Its AI Potential
The Department of Government Efficiency ("DOGE") was never meant to fly under the radar...
Launched last year with a mandate to slash costs and bring AI into every corner of the U.S. government, the agency has bulldozed through bureaucracy.
DOGE has spent the past several months scrutinizing every corner of the government. Federal agencies from the IRS to the Department of Defense were ordered to open their data vaults.
But now, DOGE itself is under scrutiny...
The agency gained access to massive troves of taxpayer data and health statistics, all in the name of making the government faster and cheaper using AI. And that doesn't sit right with a group of federal auditors.
The Government Accountability Office ("GAO"), a nonpartisan office that provides auditing and other services for Congress, has been auditing DOGE since last month.
It's looking into whether the agency moved too fast... possibly overlooking the most basic safeguards around privacy, data quality, and transparency.
In short, Washington, D.C.'s boldest AI initiative just hit a wall. Folks at the top may have to rethink how AI gets built – and who gets to build it.
This could be a turning point for the government. And it could be good news for a select group of stocks...
AI can't fix government until someone fixes the data...
DOGE was created to apply cutting-edge AI to longstanding inefficiencies. It's looking at areas like slow, wasteful procurement processes and antiquated benefits systems.
But AI is only as smart as the data it learns from. And in this case, the federal government's data is still a mess...
Different departments maintain overlapping systems that rarely communicate with one another. Some still use software built in the 1980s. Records are often incomplete or inconsistent. They might not have been updated for years.
So while AI models promise speed and scale, they stumble when they're fed chaotic inputs. That's a dangerous mismatch when you're trying to manage things like social services, military supply chains, or Medicare reimbursements.
The audit is examining whether DOGE had formal risk-management protocols for the data it was ingesting. It could have failed to vet sources or properly label sensitive inputs.
That's a recipe for inaccurate predictions and policy misfires.
The GAO's official report hasn't yet been released. But the audit has already clarified the next phase of AI development for the government... data resilience.
DOGE needs a lift from specialized data infrastructure firms. These companies provide the underlying scaffolding for AI. They clean, standardize, label, and secure enormous quantities of data.
They help identify biases, remove redundancies, and ensure systems can trace every decision back to a verified source.
In short, they make messy government records usable for the high-stakes world of machine learning.
And now, their role is front and center.
Agencies aren't just looking for flashy models anymore...
They need reliable tools, built and maintained by companies that understand data integrity.
The GAO's findings could soon spark a spending wave. DOGE has already paused some pilot programs. But the agency isn't scaling back its ambitions.
If anything, it's doubling down.
We expect a sharper focus on partnerships that can shore up DOGE's data quality and compliance. That means billions of dollars in potential contracts for companies that specialize in these critical areas.
Private-sector vendors with a track record in health care, defense, or financial auditing are particularly well positioned. Several are already in talks to provide remediation plans for DOGE's flagged systems.
The media is fixated on the audit's red flags. But for investors, it's more important to focus on a far more lucrative takeaway...
The government just got a wake-up call about implementing AI...
We've been watching this story closely. It's coming at a critical time... because the next phase of the DOGE master plan is about to kick off.
Government insiders have been preparing for this moment since January. But the mainstream media has barely said a word. And we expect the vast majority of investors will miss out as a result.
The GAO's audit could make clear some glaring potential oversights at DOGE. But that won't stop the government's AI rollout.
It's not about reversing course. It's about better data... and those that can provide it.
We're seeing this emphasis on accuracy and efficiency play out in the global AI industry today. So this will be a major focus for Washington, D.C. as it aims to keep up with the rest of the world's AI advancements...
In January, China's DeepSeek AI made headlines by claiming it could match Western AI models at a fraction of the cost.
This announcement caused an initial panic. Analysts worried AI was becoming a commodity... that the billions of dollars poured into chips were being wasted on an industry destined for shrinking margins.
But history suggests the opposite. As AI gets cheaper, companies won't cut back on usage. They'll find new ways to apply it.
Businesses will train more models, embed AI into more products, and use it for applications that weren't cost-effective before. Startups that couldn't afford an AI model will suddenly be able to. The overall market will increase.
Folks, AI adoption isn't slowing down... It's accelerating. Short-term volatility won't stop this long-term trend.
Regards,
Joel Litman
Editor's note: You don't have to navigate this AI chaos blind...
That's why Joel just hosted an urgent briefing with his colleague Rob Spivey to detail how you can root out emerging opportunities in this sector... and share four specific stocks to help you get ahead of today's rapid AI adoption.
They explained everything you need to know to capitalize on this unique setup. Click here to catch up on the full details...