OpenAI Wins $200 Mn Contract with US Military

FILE PHOTO: OpenAI logo is seen in this illustration taken May 20, 2024. REUTERS/Dado Ruvic/Illustration/File Photo/File Photo
FILE PHOTO: OpenAI logo is seen in this illustration taken May 20, 2024. REUTERS/Dado Ruvic/Illustration/File Photo/File Photo
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OpenAI Wins $200 Mn Contract with US Military

FILE PHOTO: OpenAI logo is seen in this illustration taken May 20, 2024. REUTERS/Dado Ruvic/Illustration/File Photo/File Photo
FILE PHOTO: OpenAI logo is seen in this illustration taken May 20, 2024. REUTERS/Dado Ruvic/Illustration/File Photo/File Photo

The US Department of Defense on Monday awarded OpenAI a $200 million contract to put generative artificial intelligence (AI) to work for the military.

San Francisco-based OpenAI will "develop prototype frontier AI capabilities to address critical national security challenges in both warfighting and enterprise domains," according to the department's posting of awarded contracts.

The program with the defense department is the first partnership under the startup's initiative to put AI to work in governments, according to OpenAI.

OpenAI plans to show how cutting-edge AI can vastly improve administrative operations such as how service members get health care and also cyber defenses, the startup said in a post.

All use of AI for the military will be consistent with OpenAI usage guidelines, according to the startup.

Big tech companies are increasingly pitching their tools to the US military, among them Meta, OpenAI and, more predictably, Palantir, the AI defense company founded by Peter Thiel, the conservative tech billionaire who has played a major role in Silicon Valley's rightward shift.

OpenAI and defense tech startup Anduril Industries late last year announced a partnership to develop and deploy AI solutions "for security missions."

The alliance brings together OpenAI models and Anduril's military tech platform to ramp up defenses against aerial drones and other "unmanned aircraft systems", according to the companies.

"OpenAI builds AI to benefit as many people as possible, and supports US-led efforts to ensure the technology upholds democratic values," OpenAI chief executive Sam Altman said at the time.



Trump Offers Support to Musk's Car Company in a Surprising Post as Tesla Stock Plunges

Mar 22, 2025; Philadelphia, PA, USA; Elon Musk and President Donald Trump during the Division I Men's Wrestling Championship held at Wells Fargo Center. Mandatory Credit: Eric Hartline-Imagn Images/File Photo
Mar 22, 2025; Philadelphia, PA, USA; Elon Musk and President Donald Trump during the Division I Men's Wrestling Championship held at Wells Fargo Center. Mandatory Credit: Eric Hartline-Imagn Images/File Photo
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Trump Offers Support to Musk's Car Company in a Surprising Post as Tesla Stock Plunges

Mar 22, 2025; Philadelphia, PA, USA; Elon Musk and President Donald Trump during the Division I Men's Wrestling Championship held at Wells Fargo Center. Mandatory Credit: Eric Hartline-Imagn Images/File Photo
Mar 22, 2025; Philadelphia, PA, USA; Elon Musk and President Donald Trump during the Division I Men's Wrestling Championship held at Wells Fargo Center. Mandatory Credit: Eric Hartline-Imagn Images/File Photo

President Donald Trump took to social media Thursday morning to support Elon Musk's car company, a startling development given their bitter public feud.

”I want Elon, and all businesses within our Country, to THRIVE,” Trump wrote on Truth Social, Reuters reported.

The post wasn't enough to help Tesla's stock, which fell sharply after the company reported another quarter of lackluster financial results and Musk warned of some potentially “rough quarters” into next year. At midday, the stock was down around 9%.

Late Wednesday, Tesla said revenue fell 12% and profit dropped 16% in the April-June quarter. Many prospective buyers have been turned off by Musk’s foray into right-wing politics, and the competition has ramped up in key markets such as Europe and China.

Investors have been unnerved by Musk's social media spat with the president because Trump has threatened to retaliate by ending government contracts and breaks for Musk's various businesses, including Tesla.

But Trump struck a starkly different tone Thursday morning.

“Everyone is stating that I will destroy Elon’s companies by taking away some, if not all, of the large scale subsidies he receives from the US Government. This is not so!" Trump wrote. “The better they do, the better the USA does, and that’s good for all of us.”

After Trump's massive budget bill passed earlier this month, Tesla faces the loss of the $7,500 EV tax credit and stands to make much less money from selling regulatory credits to other automakers. Trump’s tariffs on countries including China and Mexico will also cost Tesla hundreds of millions of dollars, the company said on its earnings call.

Musk has blasted the budget bill on his own social media platform X for adding to US debt at a time when it is already too large. The Tesla CEO has called the budget pushed by the president a “disgusting abomination” and has threatened to form a new political party.

On Wednesday's call, Musk said the electric vehicle maker will face “a few rough quarters” as it moves into a future focused less on selling cars and more on offering people rides in self-driving cars. He also talked up the company's business making humanoid robotics. But he acknowledged those businesses are a ways off from contributing to Tesla’s bottom line.

Tesla began a rollout in June of its paid robotaxi service in Austin, Texas, and hopes to introduce the driverless cabs in several other cities soon. Musk told analysts that the service will be available to probably “half of the population of the US by the end of the year — that’s at least our goal, subject to regulatory approvals.”

“We’re in this weird transition period where we’ll lose a lot of incentives in the US,” Musk said, adding that Tesla “probably could have a few rough quarters” ahead. He added, though, “Once you get to autonomy at scale in the second half of next year, certainly by the end of next year, I would be surprised if Tesla’s economics are not very compelling.”