In one of the most sweeping AI investments in U.S. defense history, the Department of Defense’s (DOD) Chief Digital and Artificial Intelligence Office (CDAO) has awarded contracts totaling nearly $800 million to four leading AI firms. The move signals a decisive pivot toward deploying frontier AI models for warfighting, intelligence, and enterprise modernization.
The contract recipients include OpenAI, Anthropic, Google Public Sector, and Elon Musk’s xAI. Each was awarded up to $200 million to develop and prototype advanced AI systems for mission-critical defense operations. The companies are expected to supply “agentic” AI solutions that are capable not just of responding to prompts, but of executing sophisticated, semi-autonomous tasks across multiple operational domains. In other words, putting AI in control of certain things.
While commercial frontier AI is scaling, DOD meanwhile has also been working on the AI Rapid Capabilities Cell (AI RCC) and has completed red-teaming pilots to uncover vulnerabilities and biases in LLMs used in healthcare environments, finding over 800 potential issues. These efforts are expected to inform the integrity of agentic AI systems before full-scale rollouts. AI RCC is a key initiative of CDAO launched in December 2024 to accelerate the adoption of frontier and generative AI across both warfighting and enterprise domains.
At that time it was announced that “through the AI RCC, CDAO and Defense Innovation Unit (DIU) will leverage $100 million in FY 2024 and FY 2025 to develop GenAI-focused pilots, a sandbox for pilot development, and user-centric experimentation …”
