Pentagon Grants $200M Contracts to xAI, OpenAI, Google, and Anthropic
Pentagon doubles down on artificial intelligence, tapping xAI, OpenAI, Google, and Anthropic to fortify the future of U.S. defense.

In a landmark move underscoring the escalating importance of artificial intelligence in national defense, the U.S. Department of Defense has greenlit contracts worth up to $200 million each for four of the nation’s leading AI developers: Elon Musk’s xAI, OpenAI, Google, and Anthropic. This initiative, revealed on July 14, signals a sweeping shift in the Pentagon’s tech strategy, pivoting from internal bureaucracy to private sector agility. It’s not just about experiments anymore. Washington is putting its money where its mission is.
At the center of this initiative is the Pentagon’s Chief Digital and Artificial Intelligence Office, known as the CDAO. Their mission is to accelerate the military’s integration of AI into core operations, from warfighting scenarios to enterprise information systems. Doug Matty, head of the CDAO, made it clear that this isn’t about theoretical innovation. It’s about deploying proven commercial solutions into real-world military settings. He emphasized that advanced AI will be woven into the very fabric of national security operations, including intelligence, logistics, and command structures.
While the Department did not disclose the exact value of each awarded contract, they confirmed the ceiling for each deal stands at $200 million. This opens up an enormous stream of potential revenue for the four tech giants, who until now have mostly fought their AI battles on the corporate frontlines. The Defense Department is now bringing that war to a new theater: government and defense infrastructure.
