In an announcement detailing its latest contracts, the DoD indicated that OpenAI will develop prototype frontier AI capabilities aimed at addressing significant national security concerns in both military and enterprise sectors. The majority of this work will be conducted in the Washington, DC area, with an anticipated completion by July 2026.

OpenAI revealed in a new blog post that the DoD contract marks its first collaboration under a fresh initiative to extend its AI technology to federal, state, and local government workers. The company is providing custom models for national security on a “limited basis,” the announcement states, emphasizing that all applications must adhere to its established policies and guidelines. Notably, OpenAI’s current policy prohibits the use of its services to “develop or use weapons” and to “injure others or destroy property.”

“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,” OpenAI said.

This isn’t the first time OpenAI has bedded down with the military, having entered a partnership with Anduril Industries in December 2024 to integrate its AI software into the defense tech company’s counterdrone systems. The new one-year DoD contract is antithetical to earlier versions of OpenAI’s terms of service that banned its technology from being used for “military and warfare” — a prohibition removed by the company last year.