OpenAI secures a $200 million contract with the U.S. military, marking the AI unicorn's official entry into the Pentagon.

On Monday, the U.S. Pentagon announced it would sign a $200 million defense contract with OpenAI to develop artificial intelligence tools to address critical national security challenges. OpenAI stated that the program would provide U.S. government agencies with customized AI models, technical support, and product roadmap information.

Written by: Bao Yilong

Source: Wall Street Journal

OpenAI enters the military-industrial market, the AI arms race behind the $200 million military contract.

On June 16, the U.S. Pentagon announced that it would sign a $200 million defense contract with OpenAI to develop artificial intelligence tools to address critical national security challenges. The Pentagon stated in a statement:

Under this project, the contractor will develop cutting-edge AI prototype capabilities to address key national security challenges in the military and enterprise sectors.

This is the first contract listed by OpenAI on the Department of Defense website, with work primarily taking place in the Washington area, expected to be completed by July 2026. OpenAI stated that the program will provide customized AI models, technical support, and product roadmap information for U.S. government agencies.

According to media reports, although OpenAI emphasized in an official blog post that the primary application scenarios of the contract will focus on improving military medical care, simplifying project procurement data analysis, and active network defense in administrative areas, and promised that "all use cases must comply with OpenAI's usage policies and guidelines," the wording of "warfighting domains" in the Pentagon's statement leaves a huge imagination space for the market.

To systematically promote such cooperation, OpenAI announced the establishment of a new department called "OpenAI for Government," and this Department of Defense contract is the cornerstone of that initiative.

Arms Race: AI Giants Compete for the Defense Pie

OpenAI's actions are not an isolated incident.

In December of last year, OpenAI announced a collaboration with defense technology startup Anduril to deploy advanced AI systems for "national security missions," while Anduril itself secured a $100 million defense contract in the same month.

The smoke of competition is also spreading in the rival camp. OpenAI's main competitor, Anthropic, announced earlier that it will collaborate with big data company Palantir and Amazon to provide its AI models to U.S. defense and intelligence agencies.

Meanwhile, as OpenAI's most critical infrastructure partner, Microsoft's Azure OpenAI Service was authorized by the U.S. Defense Information Systems Agency in April of this year to process classified information at the "secret" level. This paves the way for OpenAI's technology to enter more sensitive defense areas.

From a purely financial perspective, this 200 million dollars may be just a drop in the bucket for OpenAI.

According to the latest data, as of June this year, the company's annualized revenue has soared to 10 billion dollars. In March this year, the company sought up to 40 billion dollars in a financing round led by SoftBank, with a valuation targeting 300 billion dollars. In addition, the "StarGate" project, announced jointly with President Trump, aims to build AI infrastructure in the United States, with an investment scale of as much as 500 billion dollars.

However, the symbolic significance of this Pentagon contract far exceeds its monetary value. Analysts believe that it not only opens up a brand new source of revenue for OpenAI that is almost unaffected by economic cycles, but more importantly, it signifies that OpenAI has officially joined this arms race.