Pentagon awards mega contracts to Musk-owned company, other firms for new ‘frontier AI’ projects

On the heels of an award to OpenAI for “frontier AI” projects, the Defense Department’s Chief Digital and Artificial Intelligence Office (CDAO) announced Monday that it has added three additional tech giants to the effort, including one owned by Elon Musk.

Anthropic, Google and xAI will join OpenAI on the CDAO’s nascent effort to partner with industry on pioneering artificial intelligence projects focused on national security applications. Under the individual contracts — each worth up to $200 million — the Pentagon will have access to some of the most advanced AI capabilities developed by the four companies, including large language models, agentic AI workflows, cloud-based infrastructure and more.

“The adoption of AI is transforming the Department’s ability to support our warfighters and maintain strategic advantage over our adversaries,” Chief Digital and AI Officer Doug Matty said in a statement. “Leveraging commercially available solutions into an integrated capabilities approach will accelerate the use of advanced AI as part of our Joint mission essential tasks in our warfighting domain as well as intelligence, business, and enterprise information systems.”

OpenAI received the first contract for the effort June 17 and will create prototypes of agentic workflows for national security missions. According to CDAO, work with all four vendors will expand the Pentagon’s experience with emerging AI capabilities, as well as give the companies better insights into how their technology can benefit the department.

The contract with CDAO is also another win for xAI, which is owned by Musk — who previously led the Trump administration’s Department of Government Efficiency (DOGE) efforts but recently had a falling out with President Donald Trump over legislation and other issues — and develops the generative AI tool called Grok. The company announced Monday that it was launching a new suite of AI tools for U.S. government users known as “Grok for Government.” The platform is now available to purchase by federal agencies through the General Services Administration, according to a post on X, which Musk also owns.

In a blog post published Monday, Jim Kelly, Google Public Sector’s vice president of federal sales, noted that the company will provide the Pentagon its Cloud Tensor Processing Units for training AI models, AI-powered agents via Google’s Agentspace, and access to the company’s infrastructure based in the contiguous United States.

“These advanced AI solutions will enable the DoD to effectively address defense challenges and scale the adoption of agentic AI across enterprise systems to drive innovation and efficiency with agile, proven technology,” Kelly wrote.

The announcement is the latest step the Defense Department has taken in recent months to accelerate adoption of AI-enabled capabilities developed by commercial companies — many of which have recently announced new business ventures focused on national security.

In June, Anthropic introduced a custom set of its Claude Gov AI models that are tailored specifically to defense use cases, ranging from operational planning to intelligence analysis. The same month, OpenAI launched a new initiative called “OpenAI for Government” that expands on its current partnerships with the Defense Department and other U.S. government agencies — including custom AI models for national security.