OpenAI inks USD200 million Pentagon agreement

(MENAFN) OpenAI, the company behind ChatGPT, has secured a $200 million contract with the U.S. Department of Defense to develop advanced AI tools for national security. Announced Monday by the Pentagon, the deal is framed as part of a broader effort to counter growing technological competition from China and safeguard democratic values.

The agreement focuses on creating prototype “frontier AI” systems for both military and administrative use. Work will be conducted in the National Capital Region and is set to be completed by July 2026.

Although this is OpenAI’s first publicly disclosed contract with the Defense Department, the company has previously collaborated on national security projects. In December, OpenAI partnered with defense firm Anduril Industries to design AI tools for anti-drone systems, aimed at enhancing decision-making and reducing operator workload.

In January, OpenAI CEO Sam Altman joined President Trump and other tech leaders to announce Project Stargate—a $500 billion AI infrastructure initiative intended to maintain U.S. dominance in artificial intelligence. That same month, OpenAI launched a customized version of ChatGPT for U.S. government use, hosted on secure Microsoft Azure servers to meet federal privacy and compliance standards.

The contract comes amid rising competition from China. In January, Chinese AI firm DeepSeek debuted a system it claimed could outperform ChatGPT in cost-efficiency and other metrics. In response, Altman reaffirmed OpenAI’s commitment to supporting U.S. leadership in AI, emphasizing the importance of defending democratic values.

In a related development, reports in April suggested OpenAI was building a new social media platform to rival Elon Musk’s X. Musk, who co-founded OpenAI but split from the company in 2018, is now competing with Altman through his own AI assistant, Grok, as tensions between the two tech leaders grow.

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