Defense Department Allocates Up to $200 Million for AI Projects to Anthropic, Google, OpenAI, and xAI

The U.S. Department of Defense (DoD) has announced the allocation of contract awards totaling up to $200 million for the development of artificial intelligence (AI) technologies. The beneficiaries of this funding include notable companies such as Anthropic, Google, OpenAI, and xAI. According to the DoD’s Chief Digital and Artificial Intelligence Office, these awards aim to expedite the adoption of advanced AI capabilities to tackle critical national security challenges.

The selected companies will focus on developing AI agents applicable across various mission areas within the agency. Doug Matty, the DoD’s Chief Digital and AI Officer, emphasized that the integration of AI is revolutionizing the Department’s capacity to assist warfighters and maintain a strategic edge against adversaries. In a related development, xAI, founded by Elon Musk, has introduced “Grok for Government.”

This initiative offers a suite of products designed to provide the company’s AI models to U.S. government customers. These products can be procured through the General Services Administration (GSA) schedule, allowing different federal government entities to access these advanced tools. Previously, in 2024, OpenAI received a year-long contract worth $200 million from the DoD.

This contract followed their announcement of a partnership with defense technology startup Anduril, focused on deploying advanced AI systems for national security objectives. OpenAI further expanded its government outreach in June with the launch of “OpenAI for Government,” which is tailored for federal, state, and local government personnel. These initiatives highlight the growing collaboration between the tech industry and government agencies in leveraging advanced AI technologies to enhance national security.