OpenAI awarded $200 million US defense contract for the use of its AI models
The contract is the DoD's first with OpenAI. It will last a year and take place largely in an area that includes Washington, DC and nearby counties in Maryland and Virginia. The company said its new program will provide federal, state and local governments access to its latest models through ChatGPT Enterprise and ChatGPT Gov, along with custom models for national security on a limited basis.
"This contract, with a $200 million ceiling, will bring OpenAI's industry-leading expertise to help the Defense Department identify and prototype how frontier AI can transform its administrative operations, from improving how service members and their families get health care, to streamlining how they look at program and acquisition data, to supporting proactive cyber defense,' the company said.
Last last year, OpenAI announced that it was partnering with Palmer Lucky's defense startup Anduril Industries to develop AI for the Pentagon. The companies said they aimed to combine OpenAI's models, including GPT-4o, with Anduril's systems and software to improve the US military's defenses against unpiloted aerial attacks. However, OpenAI and the DoD didn't reference Anduril or drone defense in their announcements today.
The contract opens up a new source of revenue for OpenAI. The company recently said that it will increase sales from around $10 billion currently all the way to $125 billion in just four years, without providing many details on how it plans to do that. Currently, OpenAI makes money from ChatGPT for consumers, along with business products and its application programming interface (API). It spends a lot more than it makes, having lost $5 billion in 2024 on around $4 billion in revenue.
In January, OpenAI announced the $500 billion Stargate program to develop additional computing power in the US. The company completed a $40 billion financing round that values it currently at over $300 billion. However, critics have argued that that despite burning enormous amounts of cash on cloud infrastructure, it still has no clear path to profitability. Relations are also reportedly tense with the company's close partner Microsoft at the moment.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Insider
9 minutes ago
- Business Insider
Alibaba Cloud founder says early innovation doesn't need top-dollar hires: 'What happened in Silicon Valley is not the winning formula'
True innovation doesn't come from highly paid engineers, but from finding the right people to build the unknown, said the founder of Alibaba's cloud and AI unit. "The only thing you need to do is to get the right person," Wang Jian said in an interview with Bloomberg published Monday. "Not really the expensive person because if it's a new business, if it's true innovation, that basically means talent," he added. Wang, who built Alibaba Cloud in 2009, said American tech giants are "very much focused on the existing success of the business." "And existing — it's average of technology," the computer scientist said. "We have a tremendous opportunity to look at technology nobody knows today." "What happened in Silicon Valley is not the winning formula," Wang said. Wang's comments come after Big Tech companies are paying top dollar to recruit elite AI talent, a trend that's likened to sports franchises competing for superstar athletes like Cristiano Ronaldo. The competition reached another level when Meta recruited Scale's CEO, Alexandr Wang, last month as part of a $14.3 billion deal to take a 49% stake in his company. Then, Sam Altman, the CEO of OpenAI, said Meta had tried to poach his best employees with $100 million signing bonuses. Just weeks ago, Google paid $2.4 billion to hire the CEO and top talent of AI startup Windsurf and license its intellectual property. OpenAI had planned to buy Windsurf for $3 billion, but the deal fell apart. "It's a typical way of doing things," Wang Jian said of Big Tech's hiring strategy. Chasing the same pool of in-demand talent isn't always a winning move, he added. "Whenever everybody knows that these are talents," Wang said, "it's better for you not to get it." "It's really about the vision, you know, where you want to go." Wang and Alibaba did not respond to a request for comment from Business Insider. China's AI race is 'very healthy' competition Wang also said that the rivalry among Chinese AI firms is not cutthroat. No single person or company can sprint forever, he said. But collectively, the ecosystem can still move fast. He pointed to a pattern he's observed: One company surges ahead, then slows. Then another takes the lead. Over time, the first catches up again. "You can have the very fast iteration of the technology because of this competition," he said. "I don't think it's brutal, but I think it's very healthy," he added. China's biggest tech players have focused on open-source AI models, which have code and architecture that are publicly available for anyone to use, modify, or build on. One analyst told Business Insider previously that Chinese firms are prioritizing consolidation to stay competitive. For instance, Tencent has deployed its Hunyuan model and DeepSeek R1 across its massive ecosystem, including WeChat. Baidu has also integrated DeepSeek R1 into its search engine. The country is closing the gap with the US in the AI race. In a Stratechery interview earlier this year, Nvidia's CEO, Jensen Huang, said that China is doing "fantastic" in the AI market, with homegrown models like DeepSeek and Manus emerging as credible challengers to US-built systems. He said China's AI researchers are some of the best in the world, and it's no surprise that US companies like OpenAI and Anthropic are hiring them. "Our competition in China is really intense," Huang said in May at the Computex Taipei tech conference in Taiwan. Huang has also said that the US and China are neck and neck in the AI chip race. "China is right behind us. We're very, very close."
Tom's Guide
10 minutes ago
- Tom's Guide
I tested ChatGPT Agent on 5 everyday tasks — here's what happened
Since the announcement of ChatGPT Agent, I'd been eagerly awaiting the model to show up in my menu of tools. ChatGPT Plus users should all have the new model now. If you don't see it, try logging out and back in it appeared, I just had to know, could the AI actually do things like cancel subscriptions, plan a family trip and order my lunch? To find out, I tested ChatGPT Agent with five very real tasks from my everyday life. Some were impressive. Others were frustrating. But all of them offered a glimpse into what the future of AI-powered assistance might actually look like. Here's what happened when I put ChatGPT Agent to work. Prompt: 'Help me find the Big Into Energy Labubu near me.'I've already found the Big into Energy Labubu with Google Search, but I wanted to see if using ChatGPT Agent was any easier. As one of the hottest toys on the market, it's nearly impossible to track one of these things followed up questioning whether I wanted more information or to purchase one. In this case, I said purchase because information is much easier to find. From there, the AI went to work. I could actually see it checking various websites, reading information, thinking and more within the chat window. In six minutes, the Agent found the Labubu I requested, added it to the cart, and headed to the checkout. It then asked for my shipping address and credit card information. I was able to take control of ChatGPT's browser to finalize the sale. Verdict: This was much faster and easier than using Google. I will definitely be using ChatGPT Agent in the future for hard-to-find items. Prompt:"Plan a 4-day family trip to San Diego, including flights from Newark, hotel options with a pool, and activities for kids under 10. Book everything using my Google account and save an itinerary in Google Docs." When I attempted to move on to the second task, my entire computer crashed and I got an error. After logging back in again, I was able to start a new prompt was a very ambitious task, but I decided to go big to really see what the ChatGPT Agent could do. The AI truly flexed its potential and its limits with this one. The agent searched Google Flights, compared hotels with kid-friendly amenities, and listed family attractions like the San Diego Zoo, LEGOLAND, and beach days. It created a beautiful daily itinerary in Docs and even embedded links to book the trip. Luckily, booking required my manual approval. For privacy and safety reasons (thankfully), the agent doesn't auto-purchase flights or rooms. Instead, it pre-filled forms and waited for me to hit "confirm." Honestly, I don't think I could ever let AI handle this part for me. I'm too much of a control freak when it comes to vacations and I don't trust AI. Verdict: An incredible planning tool and I think it's fun to see the AI 'working' through the prompt. I don't think that will ever get old. Prompt: "Create a 5-day healthy dinner meal plan under 600 calories per meal. Then generate a grocery list, check prices at my local ShopRite, and export it to a spreadsheet." Meal planning is one of those chores that sounds easy until it's 5 p.m. and your fridge is full of random ingredients that don't go together. ChatGPT Agent solved that problem fast. It generated five balanced dinner recipes (lemon herb chicken, veggie stir-fry, ravioli, etc.) with simple ingredients and clear instructions. Then it built a grocery list categorized by section (produce, pantry, dairy), checked local prices through Instacart data, and exported everything to Google Sheets. It even told me which ingredients were on sale nearby. I emailed the list to myself to use next time I go shopping. Verdict: I often refer to AI as a 'game-changer' sometimes ad nauseum, but it's so wildly helpful for things like this, that I can't think of a better descriptor. This task felt like having a personal nutritionist and assistant rolled into one. 10/10 will use again. Prompt: "Order me a chicken Caesar wrap and a lemonade from DoorDash." Luckily, ChatGPT didn't crash after the first time and I was ready to order lunch. Immediately arriving on DoorDash, the AI asked me to log in. I wanted to make this as 'hands off' as possible so I told it to use the site as a guest. I had read in several forums that ordering food had caused some users to get frustrated at ChatGPT Agent. So I was prepared for things to go awry. The only hiccup I had was the AI not knowing my zip code because it signed in as a guest. Once I told it, everything went ordered my lunch and then handed everything over to me when it was time to pay and enter my address. Because I hadn't specified a restaurant, I was impressed by ChatGPT's ability to find a chicken Caesar wrap on its More of a helpful sidekick than a hands-free solution. This wasn't much of a time saver and I probably will order lunch for myself without using ChatGPT Agent. Prompt: 'I have to renew my license and get a real ID. Can you book an appointment for me at my local Department of Motor Vehicles?'When I got a notice in the mail the other day that I couldn't renew my license online, I got that feeling of dread in the pit of my stomach. The thought of spending hours at my local Motor Vehicle office especially in the summer, was overwhelming. But in 19 seconds, ChatGPT pulled up everything I needed to book an appointment and I was all set. Zero hassle. Verdict: Fast, smart and surprisingly effective for a niche errand. ChatGPT Agent isn't perfect, but it's one of the most capable AI tools I've tested to date. It won't replace your human assistant just yet, but if you're like me and don't have a human assistant to begin with, it's the next best thing. It can handle real, time-consuming tasks that go far beyond answering questions or summarizing PDFs. If you're already using ChatGPT Plus or Team, it's absolutely worth trying — just be prepared to step in here and there and occasionally restart the app completely. Follow Tom's Guide on Google News to get our up-to-date news, how-tos, and reviews in your feeds. Make sure to click the Follow button.
Business Insider
41 minutes ago
- Business Insider
Mark Cuban said the Trump administration needs to crack down on ads in AI models
"Shark Tank" star Mark Cuban said on Saturday that the White House should "make it illegal for AI models to offer advertising." Cuban said in an X post addressed to David Sacks, the White House's AI and crypto czar, that the administration should "examine referral fees as well." "The last thing we need is to have algorithms designed to maximize revenue driving LLM output and interactions," Cuban wrote. "They are already recommending brands and we don't know if they are getting paid for it. We need to have learned our lessons from algos in social media," he added. Cuban said in a subsequent post on Saturday that he would be willing to accept advertising on AI models if they are "identified as an ad" and kept "completely independent from the user generated chats." Cuban's proposal comes just days after the Trump administration unveiled its 28-page " AI Action Plan" on Wednesday. Back in January, President Donald Trump had signed an executive order calling for "existing AI policies and directives that act as barriers to American AI innovation" to be revoked. Trump has adopted a relatively light-touch approach toward AI regulation compared to his predecessor, President Joe Biden. In October 2023, Biden signed an executive order demanding greater transparency from companies developing AI tools. Trump's new "AI Action Plan" proposed withholding federal funding from states that want to impose "burdensome" AI regulations. Cuban and the White House did not respond to requests for comment from Business Insider. Social-media déjà vu Cuban's worries may not be unfounded. Major AI players such as have been deepening their leadership bench with former executives from social media platforms like Facebook and Instagram. In May, OpenAI chief Sam Altman said he had hired Fidji Simo, the CEO and chair of Instacart, to serve as OpenAI's new CEO of applications. Before she joined Instacart, Simo worked at Meta, where she oversaw Facebook's app and advertising products. Last year, OpenAI hired Kevin Weil as its chief product officer. Weil was previously vice president of product at Instagram and senior vice president of product at Twitter. OpenAI's rival, Anthropic, made a similar move in May 2024 when it hired Mike Krieger, cofounder and former CTO of Instagram, as its chief product officer. Cuban has long warned about the risks and dangers that could come with AI tools like chatbots. He told comedian Jon Stewart in a podcast interview that aired in 2023 that online misinformation "is only going to get worse" with the proliferation of AI tools. "Once these things start taking on a life of their own, it will be difficult for us to define why and how the machine makes the decisions it makes, and who controls the machine," Cuban said. Last week, Cuban wrote in an X post that he expects AI companies to hoard talent and intellectual property to stay ahead of their competitors. "If you create valuable IP, encrypt and silo it. Let companies bid on it. Or just use it for your own behind a paywall model. IP is KING in an AI world," Cuban wrote on July 20.
