The U.S. Department of Defense has awarded contracts to four leading artificial intelligence firms, xAI, Anthropic, Google, and OpenAI, each with a ceiling value of $200 million, as part of a major push to harness cutting-edge AI technology for national security.
Announced Monday by the Pentagon’s Chief Digital and Artificial Intelligence Office (CDAO), the contracts will allow the Department of Defense (DoD) to “leverage the technology and talent of U.S. frontier AI companies to develop agentic AI workflows across a variety of mission areas.”
Among the companies awarded, Elon Musk’s xAI drew particular attention following recent controversy over antisemitic and extremist content generated by its Grok chatbot.
The company issued an apology after Grok, in a post-update phase on July 7, praised Adolf Hitler, referenced “anti-white hate,” and claimed Jewish overrepresentation in Hollywood.
xAI blamed faulty instruction prompts and said it had corrected the issues.
Despite the backlash, xAI moved forward with the launch of “Grok for Government” on Monday, offering its services to federal departments and agencies.
The firm also secured a place on the government’s official supplier list, enabling broader adoption of its AI tools beyond the Pentagon.
This defense contract comes amid ongoing tensions between Musk and President Donald Trump.
Although Musk supported Trump’s recent campaign and led a government spending review agency known as DOGE, he later criticized the administration’s budget for raising national debt, sparking a public dispute. Musk eventually apologized for some of his comments.
Meanwhile, OpenAI, which had already announced a similar $200 million contract in June, is also expanding its government-focused AI services.
Meta, another major tech player, has partnered with defense startup Anduril to develop VR headsets for military and law enforcement use.
The CDAO emphasized that these partnerships are crucial for advancing the DoD’s capabilities in frontier AI and ensuring the defense sector remains aligned with the latest technological innovations.
“Establishing these partnerships will broaden DoD use of and experience in frontier AI capabilities and increase the ability of these companies to understand and address critical national security needs with the most advanced AI capabilities U.S. industry has to offer,” the CDAO stated.
Written By Rodney Mbua
