On June 17, 2025, the Pentagon signed a contract worth $200 million with OpenAI, the developer of ChatGPT, to create artificial intelligence (AI) tools. According to the U.S. Department of Defense, OpenAI will develop prototypes of advanced AI to address key national security challenges, including military operations and administrative processes. The work will primarily take place in Washington, with an estimated completion in July 2026.
This contract is part of the OpenAI for Government initiative, which aims to provide U.S. government agencies with access to customized AI models. The company emphasizes that the use of the technology will comply with its policy, prohibiting the development of weapons or causing harm. OpenAI is already collaborating with defense company Anduril for drone defense, and the contract with the Pentagon strengthens its position in the defense technology market.
William Blair analysts note that the deal is one of the largest for software providers by annual value, which could intensify competition with Palantir. The contract also reflects the growing interest of the Pentagon in AI for modernizing the military.
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