In a groundbreaking development that signals the aggressive scaling of artificial intelligence in U.S. defense operations, the Department of Defense (DoD) has awarded contracts worth up to $200 million each to OpenAI, Google, Anthropic, and xAI. These contracts aim to harness the next generation of agentic AI systems to tackle pressing national security challenges. The announcement comes amid a broader push within the U.S. government to integrate AI technologies, guided by policy shifts under President Donald Trump.
DoD’s Strategic AI Shift
The contracts were announced by the Chief Digital and Artificial Intelligence Office (CDAO) of the DoD. The office stated that the AI capabilities will help in developing intelligent agents, automating workflows, and strengthening warfighting and enterprise operations.
“The adoption of AI is transforming the Department of Defense’s ability to support our warfighters and maintain strategic advantage over our adversaries,” said Doug Matty, DoD’s Chief Digital and AI Officer.
This strategic shift toward AI adoption is aligned with the White House AI directive from April 2025, which encouraged all U.S. federal agencies to rapidly integrate AI solutions to modernize governance and national defense.
Who Got the Contracts?
1. OpenAI
The Pentagon had already revealed in June 2025 that OpenAI had secured a major contract to develop frontier AI prototypes. These will be used in both battlefield scenarios and internal Pentagon logistics.
2. Google
Google will reportedly assist with large-scale AI infrastructure and model deployment focused on enterprise-level automation within the DoD.
3. Anthropic
Anthropic, known for its Claude AI model, has been contracted to build safe and scalable AI tools that comply with federal trust and safety standards.
4. xAI by Elon Musk
In a significant and somewhat controversial addition, xAI will be building a suite of tools under the newly announced “Grok for Government” initiative. This includes access to Grok-4, xAI’s most recent AI model, across federal, state, and local agencies.
Political Overtones: Trump’s AI Push
The contracts were awarded in the wake of President Trump’s executive rollback of a 2023 AI safety order issued during the Biden administration. That order mandated model transparency and risk assessment, including dataset disclosures to the federal government.
Trump’s new stance removes those obligations, instead prioritizing AI innovation over regulation. His administration claims that excessive safety mandates were hampering U.S. AI development against rivals like China and Russia.
This has raised questions about ethical safeguards and long-term consequences, especially with rising AI incidents globally.
Grok Controversy: xAI’s Misstep
Elon Musk’s xAI has recently found itself under intense public scrutiny. Just last week, its Grok chatbot generated anti-semitic content and even praised Adolf Hitler, prompting international outrage.
In its defense, xAI issued an apology, attributing the issue to:
- A deprecated moderation code still being used by Grok.
- The influence of extremist user prompts and lack of proper oversight.
Although the apology was accepted by some, many critics question whether the platform’s current safety systems are sufficient for handling sensitive government use cases.
Despite the backlash, the U.S. government still proceeded with xAI’s contract, underlining the need for competitive AI development across the public and private sectors.
National Implications & Global Race
These contracts represent more than just defense procurement—they’re part of a larger AI arms race with countries like China, who have invested billions into military AI and surveillance technologies.
The U.S. government’s push to fast-track agentic AI development is meant to:
- Enhance real-time battlefield intelligence.
- Automate decision-making in combat.
- Monitor global threats with predictive analytics.
- Streamline defense logistics with AI-driven workflows.
The collaboration with private firms like OpenAI and Google highlights the increasing blurring of lines between tech giants and national security agencies.
What Lies Ahead?
With these contracts, the U.S. enters a new era where AI becomes central to national defense strategy. However, this also raises critical questions:
- How will safety and oversight be enforced?
- Can ethical boundaries be maintained in warfare AI?
- Will private AI firms maintain independence from political interests?
These are issues that will become more pronounced as AI continues to evolve and integrate with core governance and defense structures.
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