OpenAI In $200m Pentagon Deal

The US Defence Department has awarded OpenAI Public Sector a $200 million (£147m) contract to supply artificial intelligence tools for a variety of uses, the Pentagon said.

The department said OpenAI’s public sector division would develop frontier AI capabilities to address national security challenges in combat scenarios as well as enterprise applications.

The Pentagon has not disclosed any prior work with OpenAI.

Combat AI

The work is to be carried out mostly in the Washington, DC area, the Pentagon said.

OpenAI said earlier this month it had reached $10bn in annualised revenue, nearly double the $5.5bn it made in all of 2024.

The one-year contract follows a deal announced last December in which OpenAI said it would work with defence technology start-up Anduril to deploy AI for national security missions.

Anduril, founded by Oculus VR co-founder Palmer Luckey, has landed several contracts related to Pentagon work, including a deal in February to take over a Microsoft contract under which the software firm had been developing HoloLens headsets for the US Army.

Earlier this month Meta said it would work with Anduril on US military technology involving AI and augmented reality.

Public services

Last year OpenAI competitor Anthropic said it would work with Palantir and Amazon to supply AI models to US defence and intelligence agencies.

In February the UK government also signed a deal for the start-up to supply AI technology, but the arrangement related to the improvement of public services rather than to the military.

Amazon-backed Anthropic and the UK’s Department for Science, Innovation and Technology (DSIT) said at the time they would explore how they could bring advanced AI to bear on public services for UK citizens.