The US Chief Digital and Artificial Intelligence Office (CDAO) is handing out millions of dollars to the leading AI companies to develop military applications. Each of these "awards" are worth up to $200 million, with Anthropic, Google, OpenAI and xAI on the receiving end.
The agency notes that this money will be used to "develop agentic AI workflows across a variety of mission areas." In other words, this is primarily for military applications. A press release says the move will "broaden" the Department of Defense's use of AI to "address critical national security needs."
🚨 CDAO is excited to announce contract awards to leading U.S. frontier AI companies – Anthropic, Google, OpenAI, and xAI – to address critical national security challenges. Read more: https://t.co/mLDDQgcAEK pic.twitter.com/dkLBQRWXFm
— DOD Chief Digital & AI Office (@DODCDAO) July 14, 2025
“The adoption of AI is transforming the department’s ability to support our warfighters and maintain strategic advantage over our adversaries,” said Chief Digital and AI Officer Dr. Doug Matty. He went on to say that this will "accelerate the use of advanced AI" in the "warfighting domain." As part of this effort, CDAO will be providing access to the latest generative AI models to "Combatant Commands, the Office of the Secretary of Defense and the Joint Staff."
For the uninitiated, CDAO is an arm of the Department of Defense that was created in 2022. The stated mission is to accelerate the department's "adoption of data, analytics and artificial intelligence from the boardroom to the battlefield."
It's worth noting that xAI is one of the companies receiving government largesse. This news comes on the same day the company started offering a version of Grok for federal use. It comes less than a week after Grok went totally off the rails and started going off on anti-semitic tirades, referring to itself as "MechaHitler."
It's also a fascinating development because the relationship between xAI CEO Elon Musk and President Donald Trump has soured in recent months. Trump has been threatening to cut Musk's companies off from government subsidies, but it looks like that threat has no teeth given today's announcement.
This article originally appeared on Engadget at https://www.engadget.com/ai/us-government-is-giving-leading-ai-companies-a-bunch-of-cash-for-military-applications-185347762.html?src=rss https://www.engadget.com/ai/us-government-is-giving-leading-ai-companies-a-bunch-of-cash-for-military-applications-185347762.html?src=rssLogin to add comment
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