The U.S. Department of Defense has awarded contracts worth up to $200 million each to four major artificial intelligence firms—Alphabet’s Google, Elon Musk’s xAI, OpenAI, and Anthropic—to help accelerate AI integration across military and national security operations, Reuters reported.
The deals aim to scale the use of “agentic AI workflows,” which involve AI systems capable of performing complex, multi-step tasks with minimal human input. The Defense Department’s Chief Digital and Artificial Intelligence Office said these tools will help tackle critical national security challenges.
“The adoption of AI is transforming the DoD’s ability to support our warfighters and maintain strategic advantage over our adversaries,” said Doug Matty, the department’s Chief Digital and AI Officer.
The contracts reflect growing government reliance on private-sector AI leaders to power next-generation defense capabilities. They also follow a broader federal push under President Donald Trump to expand AI use across agencies. In April, Trump reversed a Biden-era executive order that had imposed mandatory data transparency requirements for AI models.
xAI, Musk’s AI startup, also launched a new suite of products Monday called “Grok for Government,” offering its latest Grok 4 model to federal, state, local, and national security agencies.
OpenAI had previously secured a $200 million Pentagon contract in June to develop frontier AI prototypes for both military and enterprise uses.
The new contracts come amid concerns over fairness in federal AI contracting. In May, Senator Elizabeth Warren urged the Pentagon to ensure competitive processes, as Musk’s Grok model gained traction in Washington.
The awards mark a deepening alignment between Silicon Valley AI firms and U.S. defense priorities, raising both opportunities and oversight challenges for AI in government.
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