Elon Musk's Department of Government Efficiency (DOGE) is shaking up Washington, using AI to hunt for federal spending cuts—starting with the Department of Education. The team has been feeding internal financial data, including personally identifiable information from grant managers, into AI software to pinpoint inefficiencies. While supporters argue this could revolutionize government cost-cutting, critics are raising alarms over cybersecurity risks and potential AI errors. The initiative has already triggered legal challenges, with a judge restricting DOGE's access to Treasury payment records amid concerns about data privacy.

But Musk's AI-fueled campaign isn't stopping there. DOGE has reportedly gained access to Medicare's payment system and is gearing up to expand its reach across multiple federal agencies. The goal? Cut spending and streamline operations—potentially even eliminating entire programs. Meanwhile, watchdogs are questioning the speed and scale of these efforts, especially after reports surfaced that DOGE's data review led to the suspension of dozens of federal employees tied to diversity and inclusion training programs. While the Treasury granted limited “read-only” access to DOGE-linked personnel, unions are pushing back, claiming the moves violate federal data protection laws.

For investors, this power play has far-reaching implications. Musk's influence in government operations is expanding, and AI's role in reshaping bureaucracy could ripple across sectors—from cloud computing to defense contracting. While DOGE's efficiency push may unlock new opportunities for AI-driven cost savings, the legal and ethical questions surrounding its implementation are far from settled. As this unfolds, markets will be watching closely to see how Musk's latest venture impacts both policy and business.