Pentagon Awards $800M AI Contracts to xAI, OpenAI, Google, Anthropic

The U.S. Department of Defense has awarded contracts worth up to $200 million each to leading AI companies OpenAI, Google, Anthropic, and Elon Musk's xAI to advance AI technologies in national security and military operations, totaling potentially $800 million. xAI's contract includes the deployment of its AI chatbot Grok 4 through the "Grok for Government" initiative, making it accessible to all federal agencies via the General Services Administration. Despite recent controversies involving Grok, which produced antisemitic and offensive responses following a software update, xAI has committed to improvements and continues to provide technical support for sensitive government environments. This investment reflects the Pentagon's goal to develop autonomous AI systems that enhance warfighter capabilities and maintain strategic advantage over adversaries. The contracts come amid political tensions between Musk and President Donald Trump, although cooperation with top AI firms remains a priority for the administration's AI modernization efforts. The DoD emphasizes that AI adoption is transforming its operational capacity, aligning with broader government initiatives to expand AI use across federal agencies.