The U.S. Department of Defence has awarded contracts worth up to $200 million each to OpenAI, Google, Anthropic, and Elon Musk’s AI firm xAI to expand the use of advanced artificial intelligence tools across military and security operations.
The contracts aim to support the development of agentic AI workflows to help the Pentagon address key national security tasks, according to the department’s Chief Digital and Artificial Intelligence Office. Chief Digital and AI Officer Doug Matty said AI adoption is changing the Defence Department’s ability to support operations and maintain its position globally.
Last month, OpenAI secured a $200 million contract to build prototype frontier AI tools for defence and enterprise use.
On Monday, xAI said it would offer a new product line called “Grok for Government” to federal, state, and security agencies. The lineup includes its latest model, Grok 4.
The announcements reflect growing cooperation between major AI firms and U.S. government agencies, which are under pressure to modernize systems using AI. A White House order in April directed federal departments to boost AI usage, while a recent move by President Donald Trump rolled back a 2023 executive order that required stricter AI risk controls and data reporting.
In May, Senator Elizabeth Warren called on the Defence Department to ensure that contracts for AI remain competitive as interest in Musk’s chatbot Grok increases among government agencies.
