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What just happened? According to the DoD’s daily listing of newly awarded contracts, the Department of Defense awarded OpenAI a $200 million contract for a year to develop advanced artificial-intelligence tools to address critical national security challenges. “in both warfighting and enterprise domains.” This deal was announced on Monday.
According to the Department of Defense, OpenAI will receive ahref=””https://www.defense.gov/News/Contracts/Contract/Article/4218062/””>$2 millions for research and development. The funds will be used to test and evaluate AI prototype models before deployment.
OpenAI will use the funds to develop frontier AI capabilities that will improve healthcare for servicemen, streamline data analysis and support proactive cyber defence. The majority of the work is expected to be completed by July 2036.
OpenAI stated in a separate posting that the contract was part of their new OpenAI for Government Initiative, which develops AI for the public sector. The company has already partnered with several federal agencies including NASA, NIH, Air Force, and Treasury Department. But this is the first contract it has received from the DoD.
OpenAI noted the contract requires that the DoD and other agencies comply with its usage guidelines and safety guidelines. The company’s policies currently prohibit its partners from using their technology to develop weapons. However, it does not prohibit them from using it “military and warfare” as it was removed from its policy document in the past year.
Although it is a major milestone for OpenAI’s short history, this $200 million contract will likely contribute very little financially to the company. The company’s revenue will reach $10 billion by June 2025. This is up from $5.5billion in December 2024. It has also set a revenue goal of $12.7 billion by 2025, driven by the increasing adoption of ChatGPT in various sectors.
OpenAI won the DoD contract a few months after announcing its collaboration with defense technology startup Anduril. The two companies were working together to develop AI tools. “national security missions.” Anduril was awarded a $100 million contract for defense in December, only weeks after OpenAI’s rival Anthropic announced partnerships to deploy AI models to US defense and intelligence agencies.
