OpenAI Secures $200M U.S. Defense Contract
OpenAI has landed a $200 million contract with the U.S. Defense Department to explore how artificial intelligence can support both administrative and security needs. The deal, which was announced on Monday, is part of a new initiative called “OpenAI for Government,” which consolidates the company’s work with various federal agencies, including NASA, the NIH, and the Air Force Research Laboratory. As part of the Pentagon contract, OpenAI will develop prototype AI tools to help with tasks like streamlining healthcare access for military families and enhancing cyber defense.
The contract marks OpenAI’s first major military partnership under its updated policies, which previously banned its AI from being used for military purposes. “This contract, with a $200 million ceiling, will bring OpenAI’s industry-leading expertise to help the Defense Department identify and prototype how frontier AI can transform its administrative operations,” the company said. While OpenAI maintains restrictions on developing weapons or harming people, it is offering national security-focused models on a limited basis.
Work under the contract will take place mainly in the Washington, D.C. area, with an expected completion date in July 2026. The deal comes as OpenAI’s business continues to surge, reporting a $10 billion annualized revenue run rate in June. The Pentagon’s move also reflects a broader government push to incorporate AI into national security efforts, as rival companies like Anthropic, Google, and Meta loosen restrictions on military AI applications.
