OpenAI Bags $200M Defense Deal to Boost Government AI Capabilities
Sam Altman -led OpenAI has won a $200 million contract from the U.S. Department of Defense (DoD) to develop frontier artificial intelligence (AI) models for national security purposes across warfighting and enterprise domains. The contract is awarded to OpenAI Public Sector LLC, with the project mostly being conducted in and around the National Capital Region and an expected completion date of July 2026. Frontier AI models are characterized by their multimodal capabilities, large scale, high computational power needs, and potential for creating significant impact across different industries.
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To mark the occasion, OpenAI launched the 'OpenAI for Government' initiative on its portal, aiming to bring its most advanced AI tools to public servants across the U.S. The segment combines all of the ChatGPT-maker's previous government-related customers and partnerships under one roof. Plus, its work with the U.S. National Labs, the Air Force Research Laboratory, NASA, NIH, and the Treasury will all be brought under the OpenAI for Government initiative.
OpenAI Doubles Down on U.S. Defense Goals
The new contract has a $200 million ceiling and is signed with the Chief Digital and Artificial Intelligence Office (CDAO). The company will provide the department access to its advanced AI tools, particularly its ChatGPT GOV and ChatGPT Enterprise products. OpenAI will help in transforming the department's administrative operations, including getting health care for service members and their families, streamline programming and acquisition data, and help prevent cyberattacks.
Last year, OpenAI also join hands with Anduril Industries to develop AI for anti-drone systems, furthering national security missions. OpenAI is taking all necessary measures to ensure that its government contracts are executed successfully, with appropriate guidance. The AI company has brought in a former top Pentagon officer to lead its national security policy team, as well as added former head of the National Security Agency, Paul Nakasone, to its board.
OpenAI's valuation and revenue base have grown in leaps and bounds within a short period. The Microsoft (MSFT) -backed company boasts 500 million weekly active users and recently announced that its annualized revenue run rate has reached $10 billion. Meanwhile, it is in the process of raising $40 billion in its latest funding round, led by Japan's SoftBank (SFTBY), which assigns a hefty valuation of $300 billion to the AI startup.
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