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    Home > Finance > US defense department awards contracts to Google, Musk's xAI
    Finance

    US defense department awards contracts to Google, Musk's xAI

    Published by Global Banking & Finance Review®

    Posted on July 14, 2025

    1 min read

    Last updated: January 22, 2026

    US defense department awards contracts to Google, Musk's xAI - Finance news and analysis from Global Banking & Finance Review
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    Tags:innovationtechnologypartnership

    Quick Summary

    The US Department of Defense awards AI contracts to Google, xAI, and others, aiming to enhance national security with advanced AI technologies.

    US Department of Defense Awards AI Contracts to Google and xAI

    (Reuters) -OpenAI, Alphabet's Google, Anthropic and Elon Musk's AI firm xAI have won contracts aimed at scaling up adoption of advanced AI capabilities in the U.S. Department of Defense, the Chief Digital and Artificial Intelligence Office said on Monday.

    Each of the contracts has a $200 million ceiling and will enable the DoD to develop agentic AI workflow and use them to address critical national security challenges, the office said.

    "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," it said.

    The Pentagon last month announced OpenAI was awarded a $200 million contract, saying the ChatGPT maker would "develop prototype frontier AI capabilities to address critical national security challenges in both warfighting and enterprise domains."

    The White House's Office of Management and Budget released new guidance in April, directing federal agencies to ensure that the government and "the public benefit from a competitive American AI marketplace.

    (Reporting by Deborah Sophia in Bengaluru; Editing by Shilpi Majumdar)

    Key Takeaways

    • •US Department of Defense awards AI contracts to major tech firms.
    • •Google and xAI among the companies receiving $200 million contracts.
    • •Contracts aim to enhance AI capabilities for national security.
    • •The initiative will broaden DoD's use of frontier AI technologies.
    • •OpenAI also secured a $200 million contract for AI development.

    Frequently Asked Questions about US defense department awards contracts to Google, Musk's xAI

    1What companies were awarded contracts by the DoD?

    The companies awarded contracts include OpenAI, Alphabet's Google, Anthropic, and Elon Musk's AI firm xAI.

    2What is the ceiling amount for each contract?

    Each of the contracts has a ceiling of $200 million.

    3What is the purpose of these contracts?

    The contracts aim to scale up the adoption of advanced AI capabilities to address critical national security challenges.

    4What recent guidance was released by the White House?

    The White House's Office of Management and Budget released guidance directing federal agencies to ensure the public benefits from a competitive American AI market.

    5What did the Pentagon announce last month regarding OpenAI?

    The Pentagon announced that OpenAI was awarded a $200 million contract to develop prototype frontier AI capabilities for national security challenges.

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