Pentagon Awards $200 Million Contracts to AI Giants for Military Applications

US Department of Defense awards contracts to Google, xAI

July 14 (Reuters) - OpenAI, Alphabet's Google (GOOGL.O), opens new tab, 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. Reporting by Deborah Sophia in Bengaluru; Editing by Shilpi Majumdar Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Autos & Transportation * ADAS, AV & Safety * Software-Defined Vehicle * Sustainable & EV Supply Chain

Anthropic, Google, OpenAI and xAI granted up to $200 million for AI work from Defense Department

The DoD's Chief Digital and Artificial Intelligence Office said the awards will help the agency accelerate its adoption of "advanced AI capabilities to address critical national security challenges." The companies will work to develop AI agents across several mission areas at the agency. "The adoption of AI is transforming the Department's ability to support our warfighters and maintain strategic advantage over our adversaries," Doug Matty, the DoD's chief digital and AI officer, said in a release. Elon Musk's xAI also announced Grok for Government on Monday, which is a suite of products that make the company's models available to U.S. government customers. The products are available through the General Services Administration (GSA) schedule, which allows federal government departments, agencies, or offices to purchase them, according to a post on X. OpenAI was previously awarded a year-long $200 million contract from the DoD in 2024, shortly after it said it would collaborate with defense technology startup Anduril to deploy advanced AI systems for "national security missions." In June, the company launched OpenAI for Government for U.S. federal, state, and local government workers.

US government is giving leading AI companies a bunch of cash for military applications

This will " support warfighters and maintain strategic advantage over our adversaries." The US Chief Digital and Artificial Intelligence Office (CDAO) is handing out millions of dollars to the leading AI companies to develop military applications. Each of these "awards" are worth up to $200 million, with Anthropic, Google, OpenAI and xAI on the receiving end. The agency notes that this money will be used to "develop agentic AI workflows across a variety of mission areas." In other words, this is primarily for military applications. A press release says the move will "broaden" the Department of Defense's use of AI to "address critical national security needs." "The adoption of AI is transforming the department's ability to support our warfighters and maintain strategic advantage over our adversaries," said Chief Digital and AI Officer Dr. Doug Matty. He went on to say that this will "accelerate the use of advanced AI" in the "warfighting domain." As part of this effort, CDAO will be providing access to the latest generative AI models to "Combatant Commands, the Office of the Secretary of Defense and the Joint Staff." For the uninitiated, CDAO is an arm of the Department of Defense that was created in 2022. The stated mission is to accelerate the department's "adoption of data, analytics and artificial intelligence from the boardroom to the battlefield." It's worth noting that xAI is one of the companies receiving government largesse. This news comes on the same day the company started offering a . It comes less than a week after Grok went totally off the rails and , referring to itself as "MechaHitler." It's also a fascinating development because the relationship between xAI CEO Elon Musk and President Donald Trump . Trump has been threatening to cut Musk's companies off from government subsidies, but it looks like that threat has no teeth given today's announcement.

Elon Musk's xAI bags $200M Pentagon contract for Grok AI rollout

Grok 4, xAI's latest model, will anchor the offering. The company claims it outperforms rivals on key benchmarks and promises features such as Deep Search, tool integration, and custom models for national security and critical science applications. It also says it will deploy engineers with government-level security clearances. The Pentagon emphasized that the move represents a shift toward commercial-first AI adoption. "Leveraging commercially available solutions into an integrated capabilities approach will accelerate the use of advanced AI," said Dr. Doug Matty, Chief Digital and AI Officer at the Department of Defense. The announcement follows a string of similar partnerships across Silicon Valley. Anthropic teamed up with Palantir to bring Claude to intelligence agencies. OpenAI launched "OpenAI for Government" after lifting its ban on military use. Meta also revised its Llama model licensing to permit defense applications. The federal embrace of xAI comes amid renewed scrutiny of Grok's behavior and output. In recent weeks, xAI's chatbot was found to be pulling opinions directly from Elon Musk's own posts on X, even when his name wasn't mentioned in the prompts. This blending of source and system raised questions about objectivity and bias.

Musk's xAI announces $200 million contract with Pentagon

* As part of that goal, the Chief Digital and Artificial Intelligence Office, which sets AI standards for the Defense Department, also announced awards Monday to Anthropic, Google and OpenAI. Driving the news: xAI said Monday that it secured the new contract with the Defense Department alongside its products being available to purchase. * "This allows every federal government department, agency, or office, to access xAI's frontier AI products," the company said. Zoom in: Its flagship AI model, Grok, also launched a suite of products available to the U.S. government. * "Under the umbrella of Grok For Government, we will be bringing all of our world-class AI tools to federal, local, state, and national security customers," the company said. * "These customers will be able to use the Grok family of products to accelerate America -- from making everyday government services faster and more efficient to using AI to address unsolved problems in fundamental science and technology." What they're saying: Douglas Matty, chief digital and AI officer at the Defense Department, said in a statement that the adoption of AI is "transforming the Department's ability to support our warfighters and maintain strategic advantage over our adversaries." * He added, "Leveraging commercially available solutions into an integrated capabilities approach will accelerate the use of advanced AI as part of our Joint mission essential tasks in our warfighting domain as well as intelligence, business, and enterprise information systems." The Pentagon and the White House did not immediately respond to Axios' request for comment.

Anthropic, Google, OpenAI and xAI granted up to $200 million for AI work from Defense Department

The U.S. Department of Defense on Monday said it's granting contract awards of up to $200 million for artificial intelligence development at Anthropic, Google, OpenAI and xAI. The DoD's Chief Digital and Artificial Intelligence Office said the awards will help the agency accelerate its adoption of "advanced AI capabilities to address critical national security challenges." The companies will work to develop AI agents across several mission areas at the agency. "The adoption of AI is transforming the Department's ability to support our warfighters and maintain strategic advantage over our adversaries," Doug Matty, the DoD's chief digital and AI officer, said in a release. Elon Musk's xAI also announced Grok for Government on Monday, which is a suite of products that make the company's models available to U.S. government customers. The products are available through the General Services Administration (GSA) schedule, which allows federal government departments, agencies, or offices to purchase them, according to a post on X. OpenAI was previously awarded a year-long $200 million contract from the DoD in 2024, shortly after it said it would collaborate with defense technology startup Anduril to deploy advanced AI systems for "national security missions."

xAI scores Pentagon contract

Elon Musk's artificial intelligence company xAI has scored a contract for up to $200 million with the Department of Defense alongside three other major tech firms, the Pentagon announced Monday. xAI, Anthropic, Google and OpenAI all received contracts with the same ceiling from the Chief Digital and Artificial Intelligence Office to help boost the agency's adoption of advanced AI, according to a press release. "The adoption of AI is transforming the Department's ability to support our warfighters and maintain strategic advantage over our adversaries," Doug Matty, the Defense Department's chief digital and AI officer, said in a statement. The announcement comes the same day xAI unveiled a suite of AI products for U.S. government customers, which it refers to as Grok for Government. xAI noted that its products will also be available to the rest of the federal government for purchase via the General Services Administration schedule. "America is the world leader in AI, and this is in no small part due to a tradition of innovation and strong investments in engineering and science," the company wrote in a news release Monday. "We're excited to contribute back to the country that made xAI uniquely possible here." The contract follows a week of controversy for Musk's AI firm, after an update caused its chatbot Grok to produce antisemitic responses. xAI ultimately deleted numerous incendiary posts and offered an apology for the chatbot's "horrific behavior" over the weekend. It suggested the "root cause" of the problem was "an update to a code path upstream" of the chatbot that was "independent of the underlying language model that powers @grok." After xAI unveiled the newest version of its AI model, Grok 4, last week, users also noticed that it appeared to reference Musk's views when responding to more controversial inquiries. Grok 4 is among the suite of products available to government customers.