OpenAI Secures First Direct Pentagon AI Contract

OpenAI has secured its first direct contract with the U.S. Department of Defense—a $200 million, one-year agreement to develop prototype frontier AI capabilities for national security in both warfighting and enterprise domains. The contract is part of 'OpenAI for Government,' which includes supplying advanced AI tools such as a specialized ChatGPT Gov product to federal, state, and local agencies. The primary focus is on administrative improvements, including streamlining healthcare access for service members and bolstering cyber defense, with all applications required to comply with OpenAI's ban on weaponization. This deal follows similar collaborations with defense tech firms like Anduril and occurs as governments increasingly integrate AI into defense and intelligence functions. OpenAI's annualized revenue run rate has recently reached $10 billion, and the contract opens a new revenue stream for the company. The announcement also comes amid reported tensions between OpenAI and Microsoft over revenue sharing and control, though both partners express continued optimism.