OpenAI wins $200 million US defense contract

By Kanishka Singh

WASHINGTON (Reuters) -ChatGPT maker OpenAI was awarded a $200 million contract to provide the U.S. Defense Department with artificial intelligence tools, the Pentagon said in a statement on Monday.

"Under this award, the performer will develop prototype frontier AI capabilities to address critical national security challenges in both warfighting and enterprise domains," the Pentagon said.

The work will be primarily performed in and near Washington with an estimated completion date of July 2026, the Pentagon said.

OpenAI said last week that its annualized revenue run rate surged to $10 billion as of June, positioning the company to hit its full-year target amid booming AI adoption.

OpenAI said in March it would raise up to $40 billion in a new funding round led by SoftBank Group at a $300 billion valuation. OpenAI had 500 million weekly active users as of the end of March.

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."

The guidance had exempted national security and defense systems.

(Reporting by Kanishka Singh in Washington; Editing by Leslie Adler)

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