U.S. Defense Department Awards OpenAI $200 Million AI Contract
The U.S. Defense Department has announced a one-year $200 million contract with OpenAI to provide artificial intelligence tools for national security missions. Most of the work will be conducted in the Washington, D.C. area. This partnership follows OpenAI’s December announcement of a collaboration with defense tech startup Anduril to deploy advanced AI systems for “national security missions.”
The Defense Department stated that the contract aims to “develop prototype frontier AI capabilities to address critical national security challenges in both warfighting and enterprise domains.” This is the first contract with OpenAI listed on the Department of Defense’s website. The agreement is part of OpenAI’s new initiative named OpenAI for Government, which includes their existing ChatGPT Gov product. This initiative will provide U.S. government bodies with access to custom AI models for national security, along with support and product roadmap information.
OpenAI emphasized that the contract will help the Defense Department “identify and prototype how frontier AI can transform its administrative operations.” Potential applications include improving healthcare for service members and their families, streamlining program and acquisition data analysis, and supporting proactive cyber defense. All use cases must comply with OpenAI’s usage policies and guidelines.
The contract is with OpenAI Public Sector LLC, and the work will primarily occur in the National Capital Region, encompassing Washington, D.C., and nearby counties in Maryland and Virginia. OpenAI is also working to expand its computing power in the U.S., as evidenced by the $500 billion Stargate project announced in January. This new contract represents a fraction of OpenAI’s revenue, which is currently generating over $10 billion in annualized sales. In March, OpenAI announced a $40 billion financing round at a $300 billion valuation.
