Elon Musk and the rise of DOGE: Will AI and Blockchain reshape federal spending?

During the past week, the newly established Government Efficiency Ministry (DOGE) has encountered much controversy. Although public opinion remains divided on the operation of this agency, there is a high likelihood that artificial intelligence (AI) and blockchain technology will be applied to optimize government spending on a permanent distributed ledger system. Can DOGE mine AI and blockchain to limit budget waste? Just last month, DOGE was established under an executive order signed by US President Donald Trump on January 20, 2025. Those who follow Trump and Elon Musk—the current head of DOGE—understand that this agency was created to modernize federal technology and software, thereby increasing the efficiency and effectiveness of government management. DOGE aims to reduce budget waste, eliminate redundant regulations, and restructure federal agencies to minimize unnecessary spending. The article will analyze the hypothesis of the benefits that artificial intelligence (AI) and distributed ledger technology can bring to the federal government in enhancing monitoring and controlling spending. Musk is known to be a strong advocate of AI, and a recent report revealed that DOGE may integrate blockchain into its operations. Below are the ways in which these two technologies can play a crucial role in promoting financial responsibility in Washington. AI helps optimize government spending Artificial intelligence (AI) has become the center of attention after OpenAI launched ChatGPT, opening a new era for AI-powered video creation, programming, and image design tools. The introduction of DeepSeek to the market has also significantly changed the expectations of the technology industry. AI has the potential to revolutionize government spending by identifying inefficiencies and cutting waste. Governments manage massive budgets in areas such as healthcare, defense, education, and infrastructure, often facing opaque financial flows. AI can analyze large amounts of data to detect anomalies, including duplicate payments, inflated contractor costs, unusual procurement patterns, or even fraud. Machine learning models trained on historical data can quickly detect abnormal transactions, helping auditors investigate in a timely manner. For example, in the healthcare field, AI can uncover fraudulent insurance claims or duplicate medical procedures, saving billions of dollars for the budget. Predictive analytics also help governments simulate budget scenarios and avoid misallocation of resources – for instance, adjusting infrastructure budgets before costs exceed projections. Furthermore, AI can automate administrative tasks such as invoice processing, minimizing delays and errors caused by humans. By converting raw data into actionable information, AI helps policymakers allocate resources more strategically and promote financial discipline. Combining AI with large-scale cloud computing platforms also enables even small localities to access advanced financial management tools. Blockchain ensures transparency in government spending Blockchain technology has been around since the advent of Bitcoin. Each transaction on Bitcoin's decentralized ledger can be permanently traced and accessed by authorized parties - from auditors, government agencies to citizens. This transparency can prevent corruption, as modifying data requires consensus across the entire network, making fraudulent behavior nearly impossible. Another example is smart contracts—self-executing agreements on the blockchain—that can automate processes such as disbursing funding or paying suppliers by only releasing funds when predefined conditions are met. For instance, infrastructure projects can automatically trigger payments upon verified milestone achievements, thereby minimizing delays and managerial intervention. Publicly disclosing ledger data in an anonymous form can promote public participation, allowing citizens to monitor spending and hold officials accountable. In disaster relief operations, blockchain can ensure that aid reaches the intended recipients by tracking the flow of funds and preventing leakage. Furthermore, integrating blockchain with AI will create a safer ecosystem: AI can detect anomalies, while blockchain records and preserves these findings, creating a transparent audit trail. Musk's viewpoint Although Musk is currently the head of the newly established agency, everyone knows that the owner of X has a deep interest in AI and blockchain technology. Initially, Musk made significant progress with the AI ​​creation application Grok and xAI. In addition, Musk also developed “Colossus”—a gigantic supercomputer facility in Memphis, Tennessee, operated by xAI. According to reports, this facility started with 100,000 Nvidia H100 GPUs, making it one of the largest AI computing clusters in the world. Recently, Colossus has been upgraded and is now operational with 200,000 GPUs. Elon Musk has long advocated for blockchain technology, often emphasizing its potential to improve transparency, performance and reduce costs. When Mario Nawfal questioned whether "should the Treasury Department be placed on the blockchain to prevent fraudulent payments?", Musk replied "yes." Musk and Tesla also endorse Dogecoin (DOGE) and Bitcoin (BTC), and frequently associate blockchain with financial freedom and decentralization, in line with his vision of technological advancement. AI and blockchain: A double-edged sword Although AI and blockchain are seen by many as beneficial, there are concerns that they may pave the way for a world dominated by tech tycoons. Despite the high efficiency these two technologies bring, some argue that they can also promote surveillance capitalism and expand state power. AI algorithms, which are hungry for data, can exploit the public expenditure system to create citizen profiles, commercialize consumer behavior, freeze accounts, or justify discriminatory policies. If the blockchain ledger becomes centralized, it can permanently store sensitive data, allowing governments to systematically monitor their citizens. When combined, AI and blockchain can create a system of automatic mass surveillance—such as smart contracts limiting access to benefits or an AI-blockchain network monitoring transactions to suppress dissenting voices. Without proper safeguards, these technologies risk eroding privacy, autonomy, and decentralization. However, most technologies also have two sides. However, American voters elected Donald Trump as the 47th President of the United States, and DOGE was established and became popular long before he took office. In fact, many US federal agencies have also been legalized through executive orders, including the Defense Intelligence Agency (DIA), the Environmental Protection Agency (EPA), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Council on Environmental Quality (CEQ), the National Security Agency (NSA), the Welfare Agency, the Drug Enforcement Administration (DEA), the Federal Emergency Management Agency (FEMA), and the Office of Homeland Security.