AI Giants Get $800 Million Defense Department Contracts
By Reuters | 14 Jul, 2025

Google, Anthropic, OpenAI and xAI all score $200 mil. Defense Department contracts aimed at adding AI capabilities to US warfighting and security capabilities.

OpenAI, Alphabet's Google, Anthropic and Elon Musk's AI firm xAI have won contracts aimed at scaling up adoption of advanced AI capabilities in the U.S. Department of Defense, the Chief Digital and Artificial Intelligence Office said on Monday.

Each of the contracts has a $200 million ceiling and will enable the DoD to develop agentic AI workflow and use them to address critical national security challenges, the office said.

"Establishing these partnerships will broaden DoD use of and experience in frontier AI capabilities and increase the ability of these companies to understand and address critical national security needs," it said.

The Pentagon last month announced OpenAI was awarded a $200 million contract, saying the ChatGPT maker would "develop prototype frontier AI capabilities to address critical national security challenges in both warfighting and enterprise domains."

The White House's Office of Management and Budget released new guidance in April, directing federal agencies to ensure that the government and "the public benefit from a competitive American AI marketplace.

(Reporting by Deborah Sophia in Bengaluru; Editing by Shilpi Majumdar)