ChatGPT maker OpenAI has secured a $200 million (approximately Ksh.25.9 billion) contract with the U.S. Department of Defense to develop artificial intelligence tools aimed at addressing national security needs, the Pentagon confirmed on Monday.
The U.S. Department of Defense said in a statement:
“Under this award, the performer will develop prototype frontier AI capabilities to address critical national security challenges in both warfighting and enterprise domains.”
The high-value agreement signals a deeper integration of cutting-edge AI technologies in defense operations, as global governments ramp up investment in artificial intelligence for both battlefield advantage and administrative efficiency.
OpenAI’s deal comes amid rapid growth in its commercial performance. The company recently revealed that its annualized revenue run rate reached $10 billion as of June 2025, with 500 million weekly active users as of March. The soaring figures reflect the widespread adoption of generative AI tools across sectors.
Earlier in March, reports indicated that OpenAI was raising up to $40 billion in a new funding round led by Japanese tech investment giant SoftBank, potentially pushing its valuation to $300 billion.
Meanwhile, the U.S. government has been increasing scrutiny and regulation of AI. In April, the White House’s Office of Management and Budget issued new guidelines directing federal agencies to promote a competitive American AI ecosystem. However, those directives explicitly exempted defense and national security-related AI systems—highlighting the Pentagon’s operational autonomy in acquiring and deploying advanced technologies.
The deal positions OpenAI as a key player in the U.S. defense innovation space, even as concerns grow globally about the ethics, governance, and control of AI in military use cases.
