The U.S. Department of Defense (DoD) has awarded high-value contracts to major artificial intelligence firms including Alphabet’s Google, Elon Musk’s xAI, OpenAI, and Anthropic. Each contract carries a ceiling of $200 million, aimed at scaling up the adoption of advanced AI capabilities within the defense sector.
Announced by the Chief Digital and Artificial Intelligence Office (CDAO) on Monday, the contracts focus on developing agentic AI workflows a form of AI capable of operating with a level of autonomy, initiative, and decision-making power in complex tasks. These systems are envisioned to assist with critical national security missions and operations, including logistics, data analysis, battlefield simulations, and cyber defense.
According to the CDAO, the initiative reflects the department’s strategic goal of integrating cutting-edge technologies to enhance operational effectiveness while maintaining ethical and responsible AI deployment. “These partnerships will help us explore innovative AI solutions to improve decision-making, optimize resources, and confront emerging threats,” the office said in a statement.
Google and xAI’s inclusion in the defense contracts is particularly notable. While Google had previously faced internal pushback over its involvement with military projects leading to the non-renewal of Project Maven in 2018 its re-engagement signals a shift in both corporate culture and government expectations. Meanwhile, Elon Musk’s xAI, founded in 2023 as a rival to OpenAI, is making its first significant foray into defense work, leveraging its strengths in general-purpose AI systems.
The funding ceiling allows each company to scale their tools and services in phases, with evaluations determining future extensions and integrations. While the precise details of each contract remain classified, the overarching aim is clear: equip the U.S. military with the most advanced, responsible, and agile AI technologies available.
As geopolitical tensions rise and AI becomes a central pillar of modern warfare and intelligence, these partnerships underscore the United States’ commitment to maintaining technological leadership in defense while carefully balancing innovation with oversight.
