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About four years ago, former Google CEO Eric Schmidt was appointed to the National Security Commission on Artificial Intelligence by the chairman of the House Armed Services Committee. It was a powerful perch. Congress tasked the new group with a broad mandate: to advise the U.S. government on how to advance the development of artificial intelligence, machine learning and other technologies to enhance the national security of the United States. The mandate was simple: Congress directed the new body to advise on how to enhance American competitiveness on AI against its adversaries, build the AI workforce of the future, and develop data and ethical procedures.

In short, the commission, which Schmidt soon took charge of as chairman, was tasked with coming up with recommendations for almost every aspect of a vital and emerging industry. The panel did far more under his leadership. It wrote proposed legislation that later became law and steered billions of dollars of taxpayer funds to industry he helped build — and that he was actively investing in while running the group. If you’re going to be leading a commission that is steering the direction of government AI and making recommendations for how we should promote this sector and scientific exploration in this area, you really shouldn’t also be dipping your hand in the pot and helping yourself to AI investments. His credentials, however, were impeccable given his deep experience in Silicon Valley, his experience advising the Defense Department, and a vast personal fortune estimated at about $20 billion.

Five months after his appointment, Schmidt made a little-noticed private investment in an initial seed round of financing for a startup company called Beacon, which uses AI in the company’s supply chain products for shippers who manage freight logistics, according to CNBC’s review of investment information in database Crunchbase. There is no indication that Schmidt broke any ethics rules or did anything unlawful while chairing the commission. The commission was, by design, an outside advisory group of industry participants, and its other members included well-known tech executives including Oracle CEO Safra Catz, Amazon Web Services CEO Andy Jassy and Microsoft Chief Scientific Officer Dr. Eric Horvitz, among others. Schmidt’s investment was just the first of a handful of direct investments he would make in AI startup companies during his tenure as chairman of the AI commission.
“Venture capital firms financed, in part, by Schmidt and his private family foundation also made dozens of additional investments in AI companies during Schmidt’s tenure, giving Schmidt an economic stake in the industry even as he developed new regulations and encouraged taxpayer financing for it,” adds CNBC. “Altogether, Schmidt and entities connected to him made more than 50 investments in AI companies while he was chairman of the federal commission on AI. Information on his investments isn’t publicly available.”

“All that activity meant that, at the same time Schmidt was wielding enormous influence over the future of federal AI policy, he was also potentially positioning himself to profit personally from the most promising young AI companies.” Citing people close to Schmidt, the report says his investments were disclosed in a private filing to the U.S. government at the time and the public and news media had no access to that document.

A spokesperson for Schmidt told CNBC that he followed all rules and procedures in his tenure on the commission, “Eric has given full compliance on everything,” the spokesperson said.