OpenAI secures $200M US defense contract to develop AI tools

OpenAI has landed its first public contract with the US Department of Defense, a one-year agreement worth up to $200 million to develop prototype artificial intelligence tools for military and administrative applications.

The deal, announced Monday, signals a formal expansion of OpenAI’s engagement with national security work.

According to the Pentagon, the contract will support “frontier AI capabilities” aimed at tackling critical challenges across both warfighting and enterprise domains.

The contract is with OpenAI Public Sector LLC and will largely be executed in the National Capital Region.

Part of 'OpenAI for Government' Push

OpenAI said the agreement is part of a broader initiative called “OpenAI for Government,” which includes access to its ChatGPT Gov product and customized AI tools for federal agencies.

The company stated the effort will be governed by its usage policies and guidelines.

The AI giant in a blog post said:

National security ties deepen

The announcement follows months of closer alignment between OpenAI and the US defense sector.

The company recently began collaborating with defense tech startup Anduril, which received a separate $100 million defense contract in December.

In April, OpenAI CEO Sam Altman said during a discussion with former NSA director and current board member Paul Nakasone that the company was “proud to and really want to engage in national security areas.”

OpenAI joins a growing field of AI firms supporting the US military. In recent months, rival Anthropic partnered with Palantir and Amazon to supply AI models to defense and intelligence agencies.

Separately, OpenAI is working on expanding its domestic computing capabilities.

In January, Altman appeared alongside President Donald Trump at the White House to announce the $500 billion Stargate initiative aimed at building AI infrastructure in the US.

The Pentagon contract represents a relatively small portion of OpenAI’s revenue.

The company is generating over $10 billion in annualized sales and in March disclosed a $40 billion financing round that valued it at $300 billion.

In April, Microsoft—OpenAI’s primary infrastructure partner—said the Defense Information Systems Agency had approved the use of Azure OpenAI services with secret-level classified information.