OpenAI has secured a $200 million U.S. Defense Department contract
OpenAI has been awarded a $200 million contract by the U.S. Department of Defense to deliver advanced artificial intelligence capabilities for national security, marking a significant new chapter in the company’s government-facing work.
Announced on Monday, the one-year agreement is the first contract between OpenAI and the Pentagon to be publicly listed, signaling the U.S. military's growing interest in leveraging frontier AI tools for both combat and administrative purposes.
A Strategic Shift Toward Defense
The award follows OpenAI's recent move into national security through a collaboration with defense-tech firm Anduril, which previously secured its own $100 million contract in December. The new contract establishes a formal path for OpenAI’s participation in critical defense initiatives, placing the company alongside peers like Anthropic and Palantir, who are also entering defense and intelligence applications.
“This contract, with a $200 million ceiling, will bring OpenAI’s industry-leading expertise to help the Defense Department identify and prototype how frontier AI can transform its administrative operations,” OpenAI stated in a blog post. “All use cases must be consistent with OpenAI’s usage policies and guidelines.”
Launching "OpenAI for Government"
The agreement is the first under OpenAI’s newly launched OpenAI for Government initiative, which includes ChatGPT Gov—a version of the AI assistant tailored for U.S. government use. The initiative aims to provide secure, custom AI models to federal agencies, along with roadmap insights and long-term support.
According to the Defense Department, the contract was signed with OpenAI Public Sector LLC and will focus on both “warfighting and enterprise domains,” indicating applications that range from battlefield intelligence to streamlining bureaucratic functions like health care and procurement data analysis. Much of the work will be based in the National Capital Region, which includes Washington, D.C., and nearby counties in Maryland and Virginia.
National Security as a Company Priority
OpenAI CEO Sam Altman has publicly expressed the company’s willingness to contribute to defense-related work, saying at a Vanderbilt University event in April, “We have to and are proud to and really want to engage in national security areas.” That discussion was held with Paul Nakasone, former head of the National Security Agency and current OpenAI board member.
OpenAI emphasized that all AI deployments under the agreement must adhere to its established safety and ethics standards—an important caveat as AI's role in military contexts continues to raise questions around transparency and oversight.
A Piece of a Much Bigger Puzzle
While $200 million is a sizable contract, it represents a relatively small portion of OpenAI’s broader business. The company is generating more than $10 billion in annualized revenue and recently closed a $40 billion funding round, pushing its valuation to an estimated $300 billion.
In January, OpenAI also announced the Stargate project, a $500 billion initiative to expand AI infrastructure across the U.S., unveiled in a joint appearance with President Donald Trump. Meanwhile, OpenAI’s technology partner Microsoft recently received clearance for its Azure OpenAI services to handle secret-level classified information for the Defense Information Systems Agency.
The AI Arms Race Accelerates
As AI becomes increasingly central to national security strategies worldwide, the U.S. government's engagement with OpenAI signals a clear intent to stay ahead in the technological arms race. With this contract, OpenAI is no longer just a leader in consumer AI—but now a growing force in shaping the digital future of American defense.
