MINNESOTA — Nate Cavanaugh and Justin Fox, both former personnel with the Department of Government Efficiency, founded a holding company named Special. The venture capital firm Andreessen Horowitz recently led the investment funding round for Special, which aims to apply artificial intelligence to various industries.
The startup intends to build a software platform to transform American industries. "One needs to look no further than childcare learning centers in Minnesota or hospice businesses in California to find immense waste at the state level from businesses that benefit from taxpayer dollars," Cavanaugh and Fox stated in a published post. Special plans to vertically integrate by acquiring businesses within its targeted sectors and operating them under its software system. Its initial focus is the senior care market through its division, FigureHealth.
Special also considers other markets for its applications. "Special is also looking at markets like construction, manufacturing, other very labor intensive, highly regulated markets that a lot of the learnings we had from DOGE can then get applied back into the private sector," Cavanaugh said. Several individuals invested in Special, including Steve Davis, a former coordinator of DOGE operations, Anthony Armstrong, former chief financial officer at xAI, Antonio Gracias, founder of Valor Equity Partners, Baris Akis, Donald Park, Adam Ramada, Brooks Morgan, Brian Armstrong, and Shyam Sankar.
Professor of public policy Don Moynihan offered a criticism of the startup's premise. "If you think the biggest issue in the American government is welfare fraud, then that suggests a pretty narrow perspective on the major challenges that we face right now. But that has been the perspective of DOGE, Musk, and the rest of the administration," Moynihan said.
Cavanaugh served as acting director of the U.S. Institute of Peace during his time with the Department of Government Efficiency. He proposed transferring a U.S. Institute of Peace building to the government, which is currently subject to litigation. Cavanaugh also served as acting director of the Interagency Council on Homelessness. While in these roles, he placed nearly all staff members on administrative leave at both the U.S. Institute of Peace and the Interagency Council on Homelessness. Both Cavanaugh and Fox participated in Department of Government Efficiency operations at the National Labor Relations Board.
Dan Berulis, an employee at the National Labor Relations Board, alleged that Department of Government Efficiency personnel compromised and transferred sensitive agency data during their access period. Berulis stated that a network address associated with Russia attempted to access agency systems after the Department of Government Efficiency personnel entered. The National Labor Relations Board's Office of the Inspector General is investigating claims submitted by Berulis. In a legal deposition, Fox stated he used a large language model to identify government contracts containing terms such as "LGBTQ," "tribal," and "BIPOC," which indicated diversity, equity, and inclusion initiatives. He also stated in a deposition that investor Anthony Armstrong served as a mentor to a personal friend.