Pentagon gives $200M contracts to OpenAI, xAI

September 11, 2025

The Pentagon has announced it is going full speed ahead in the development of defense AI technology, awarding contracts worth up to $200 million to four of the industry’s biggest players: Anthropic, Google, OpenAI, and xAI.

According to the U.S. Department of Defense (DoD), the goal of these contracts is to accelerate the deployment of advanced artificial intelligence across all segments of American defense operations. The plan includes applying the latest agent systems and LLMs on battlefields, in intelligence analysis, logistics, and command structures.

Just last month, OpenAI secured its own $200 million Pentagon contract, after earlier this year forming a partnership with defense-tech startup Anduril to develop AI solutions for national security. At the same time, Elon Musk’s xAI has introduced Grok for Government, a package of tools that gives U.S. federal agencies direct access to its AI models.

This move underscores how the Pentagon is increasingly relying on the speed and resources of the private sector, moving beyond a purely defensive stance and placing artificial intelligence at the core of the U.S. defense arsenal. But at the same time, the boundary between military and consumer technology is becoming more blurred—faster than ever before.

In brief: Tech World Highlights

Archer Aviation’s electric vertical aircraft Midnight eVTOL has just completed a record 55-mile flight in 31 minutes, reaching speeds of 126 mph (around 203 km/h).
A German court has ordered Apple to stop advertising its smartwatches as “carbon neutral,” ruling it as greenwashing.
Trump has appointed Airbnb co-founder Joe Gebbia as the first U.S. Chief Design Officer, tasked with redesigning 26,000 outdated federal websites.
U.S. tech giants Meta, X, and LinkedIn have appealed Italy’s landmark VAT demand, a case that could impact tax rules across all 27 EU member states.
OpenAI and SoftBank’s multibillion-dollar Stargate AI project has reportedly scaled back its ambitions and now plans to build only a small data center in Ohio this year.