OpenAI secures $200 million deal with U.S. Defence Department

The U.S. Defence Department has awarded OpenAI a $200 million contract to develop artificial intelligence tools for national security.

The Pentagon said Monday the company will create prototype frontier AI systems for use in both military operations and administrative functions.

The work will take place mostly in and around Washington, with a target completion date of July 2026, according to the Pentagon.

OpenAI, the developer behind ChatGPT, recently reported that its annual revenue run rate had reached $10 billion as of June. The company said it is on track to meet its yearly goals amid strong demand for AI technology.

In March, OpenAI announced plans to raise up to $40 billion in funding at a $300 billion valuation, with SoftBank Group expected to lead the round. As of the end of March, OpenAI reported 500 million weekly active users.

In April, the White House Office of Management and Budget issued new guidelines requiring federal agencies to support a competitive AI market. The rules did not apply to defence and national security systems.