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Home»Technology»OpenAI’s $200M DoD contract may squeeze frenemy Microsoft
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OpenAI’s $200M DoD contract may squeeze frenemy Microsoft

AdminBy AdminJune 17, 2025No Comments3 Mins Read
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OpenAI's $200M DoD contract could squeeze frenemy Microsoft
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OpenAI mentioned Monday the U.S. Division of Protection granted it a contract for as much as $200 million to assist the company establish and construct prototype methods that use its frontier fashions for administrative duties and extra.

OpenAI supplies just a few examples of potential tasking, similar to serving to service members get healthcare, streamlining knowledge on varied applications, and “supporting proactive cyber protection.” The corporate additionally mentioned that “All use circumstances have to be in line with OpenAI’s utilization insurance policies and pointers.” 

The DoD’s announcement used barely extra easy wording. It says, “Below this award, the performer will develop prototype frontier AI capabilities to deal with important nationwide safety challenges in each warfighting and enterprise domains.”

Whether or not that reference to war-fighting applies to the weapons themselves or simply different areas related to wars, like paperwork, stays to be seen. OpenAI’s pointers do forbid particular person customers to make use of ChatGPT or its APIs to develop or use weapons. Nonetheless, OpenAI deleted the specific prohibitions of “army and warfare” in its phrases of service again in January, 2024.

Given how closely some highly effective folks in Silicon Valley have warned of the risks of China’s superior LLM fashions, it’s not shocking the DoD needs to make use of OpenAI for no matter functions it needs. For example, Marc Andreessen, co-founder of VC agency Andreessen Horowitz, an OpenAI investor, just lately appeared on Jack Altman’s “Uncapped” podcast (brother of Sam Altman). Andreessen described the race between China’s AI and the western world’s fashions as a “chilly battle.”

Nonetheless, maybe an equally fascinating a part of this announcement is what it says about OpenAI’s more and more strained relationship with its main investor Microsoft.

Microsoft has hundreds of contracts with the federal authorities price tons of of hundreds of thousands of {dollars}. It has, for many years, been implementing the strict safety protocols essential for the federal government – particularly the DoD – to make use of its cloud. 

OpenAI introduced this deal as a part of its broader new “OpenAI for Authorities” program, which consolidates numerous different applications it makes use of to promote wares on to authorities businesses, together with the U.S. Nationwide Labs⁠, the Air Power Analysis Laboratory, NASA, NIH, and the Treasury, in accordance with the corporate.

However it was solely in April that Microsoft introduced the DoD had authorised its Azure OpenAI Service for all categorised ranges. Now the DoD can also be going straight to the supply. From Microsoft’s perspective: ouch.

Neither OpenAI nor Microsoft instantly responded to a request for remark.


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