Musk’s Neuralink falsified federal forms, claims to qualify for racial diversity program
The company, owned by the world's wealthiest man, says it is a "small disadvantaged business"
On April 24, Elon Musk's $9 billion neurotechnology company falsely self-certified as a "small disadvantaged business" (SDB) on a federal filing, a designation that qualifies the company for preferential treatment as part of a racial and ethnic diversity initiative.
The SDB designation can also only be legally claimed by companies owned by "economically disadvantaged individuals."
Neuralink, which is developing implantable brain-computer interfaces, registered with the government as an SDB while Musk leveraged his position at the White House to cut federal funding for diversity, equity, and inclusion programs.
The SDB designation is clearly defined by the Small Business Administration and in federal regulations. A SDB must be "unconditionally and directly" majority-owned (51%) by a member of a socially and economically disadvantaged group, meaning a demographic "subjected to racial or ethnic prejudice or cultural bias."
Even if a business clears that hurdle, not all are eligible for the designation. To be considered an SDB, the company must also be majority-owned by an "economically disadvantaged individual." According to the Code of Federal Regulations:
Economically disadvantaged individuals are socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same or similar line of business who are not socially disadvantaged.
Federal regulations state that individuals with a net worth exceeding $850,000, excluding the value of their primary residence, are not "economically disadvantaged individuals."
Musk, the owner of Neuralink, has an estimated net worth of $404 billion. A South Africa-born white man raised in the Anglican Church, Musk is also not a part of any recognized disadvantaged ethnic or racial group.
As a private company, Neuralink’s exact ownership structure is opaque. But in a September 2018 letter to the Securities and Exchange Commission, Neuralink lawyer Roel Campos wrote, "Neuralink is a private Delaware Corporation with its head offices at 3180 18th St, San Francisco, CA, 94110, in which Mr. Musk has a majority ownership stake." Neuralink has since reincorporated in Nevada. "Never incorporate your company in the state of Delaware," Musk said in January 2024, a few days after Neuralink left the state of Delaware.
With the federal government awarding $50 billion to SDBs annually, carrying the SDB designation is a significant advantage for companies seeking government contracts. SDBs also receive increased visibility on federal databases, including the Small Business Administration's Dynamic Small Business Search (DSBS). Neuralink currently appears on the DSBS as a "Self-Certified Small Disadvantaged Business."
Since 2017, Neuralink has made the SDB business claim in all 11 of its filings on SAM.gov, the federal government's contracting database. Many of those filings were signed by Jared Birchall, Musk's top fixer and Neuralink's CEO. The SDB designation is also visible on the main page of the company's SAM.gov profile.
There is no indication that Neuralink has received federal funds, although it may have bid on federal contracts. Based on its SAM.gov filings, the company may have also requested grants, loans, or other financial assistance from the federal government while certifying itself as an SDB.
In three SAM.gov filings, Neuralink responded "Yes" to the question, "Does Neuralink Corp. wish to apply for a Federal financial assistance project or program, or is Neuralink Corp. currently the recipient of funding under any Federal financial assistance project or program?" Those filings were all submitted during the COVID-19 pandemic, in September 2020, May 2021, and August 2021.
Birchall and other Neuralink executives who signed the SDB self-certification forms attested to the following:
I understand that I may be subject to criminal prosecution under Section 1001, Title 18 of the United States Code or civil liability under the False Claims Act if I misrepresent NEURALINK CORPORATION in any of these representations or certifications to the Government.
Neuralink did not respond to a request for comment.
The Department of Justice has prosecuted government contractors for submitting false self-certification claims or misrepresenting the status of their companies on federal databases. In 2023, one contractor received a 15-month prison sentence and was ordered to pay $72,000 in restitution after he fraudulently self-certified his company as a service-disabled veteran-owned small business. Last year, another company was fined nearly $4 million for misrepresenting itself as a women-owned small business on its SAM.gov profile.
Neuralink's misrepresentation is particularly notable, given Musk's past condemnations of diversity, equity, and inclusion (DEI) programs aimed at helping members of historically disadvantaged groups. "DEI is just another word for racism," Musk said in January of this year. "Shame on anyone who uses it," he added. Musk has also described DEI as "actually illegal."
While leading the Department of Government Efficiency, the Trump administration's austerity program, Musk claimed that he was ferreting out and terminating federal DEI initiatives. DOGE, under Musk's guidance, focused on purging federal DEI grants and contracts for minority owned businesses, including legitimate SDBs.
In May, after Neuralink secured $600 million in fresh funding, the company had a $9 billion before-cash valuation, according to Semafor.
Excellent reporting. Thank you. Always appreciate pointing out the hypocrisy.
So, if this is definitely a false representation of this company, why is it allowed to remain?