Anthropic, Google and xAI win $200M each from Pentagon AI chief for ‘agentic AI’ – Breaking Defense

WASHINGTON
—
The
military’s
central
artificial
intelligence
hub
has
quadrupled
down
on
its
investment
in
commercial
“frontier
AI.”

This
morning,
the
Pentagon’s
Chief
Digital
&
AI
Office
(CDAO)

announced
that
it
would
split
$600
million
in
contracts
evenly
among
Anthropic,
Google,
and
xAI,
following
on

a
similar
$200
million
award
to
OpenAI
announced
last
month.

If
CDAO
exercises
all
its
options
on
all
four
contracts
—
which
isn’t
guaranteed
—
that’s
a
total
of
$800
million
the
Pentagon
is
pouring
not
into
bespoke
military
R&D
from
dedicated
defense
contractors,
but
into
widely
available,
widely
applicable
commercial
tech.

xAI
and

OpenAI
also
both
used
their
awards
to
announce
the
launch
of
‘For
Government’
business
units,
in
the
case
of
xAI
using
its
Grok
platform.

The
embrace
of
“commercial
off-the-shelf”
has
been
especially
notable
in
AI.
After
OpenAI
kicked
off
the
current

generative
AI
explosion
with
its
launch
of
ChatGPT
in

November
2022,
the
Pentagon,
much
like
the
private
sector,
scrambled
to
understand
the
new
technology,
launching
the
high-level

Task
Force
Lima
that
conducted

almost
18
months
of
studies
before
blessing
GenAI
as
an

ongoing
area
investment.
Since
then,
CDAO
has
partnered
with
the
Army’s
Enterprise
LLM
Workspace
to
bring

a
toolkit
combining
multiple
commercially
available
GenAI
models
to
a
wide
array
of
Defense
Department
offices.

Now,
however,
CDAO
wants
to
go
beyond
GenAI
to
what
many
in
the
business
consider
the
next
frontier,
so-called
“agentic”
AI.
“The
awards
to
Anthropic,
Google,
OpenAI,
and
xAI
—
each
with
a
$200M
ceiling
—
will
enable
the
Department
to
leverage
the
technology
and
talent
of
U.S.
frontier
AI
companies
to
develop
agentic
AI
workflows
across
a
variety
of
mission
areas,”
CDAO’s
press
release
states.

Where
the
breakthrough
of
generative
AI
was
that
it
allowed
computers
to
generate
novel
content
—
never-before-seen
text,
images,
or
even
videos
—
agentic
AI
would
allow
computers
not
only
to
generate
plans
but
to
take
some
kind
of
action
on
them.
You
might
ask
GenAI
to
devise
an
itinerary
for
your
vacation
and
identify
the
best
hotels
and
restaurants
in
the
area;
an
agentic
AI,
however,
would
actually
be
able
to
book
the
reservations
with
your
credit
card.
The
military
has
already

experimented
with
using
AI
agents
to
do
staff
work
that
would
previously
have
required
a
human,
while

severely
restricting
— albeit

not
completely
prohibiting
—
any
project
that
would
give
software
the
ability
to
use
lethal
force
without
human
authorization.

The
CDAO
announcement
leaves
open
what
the
“variety
of
mission
areas”
might
include.
The
office
has
been
explicit
in
the
past
that
it
aims
to
apply
AI
to
both
the
Pentagon’s
back-office
business
processes,
which
run
a
lot
like
any
corporation’s,
and
to

its
uniquely
military
functions.

Admittedly,
even
the
full
$800
million
is
a
fraction
of
the
funding
the
big
AI
companies
are
getting
from
civilian
sources:

OpenAI
alone
reported
$10
billion
in
annualized
revenue
last
month
and
raised
a
record-breaking
$40
billion
from
investors
in
March.
It’s
also
a
fraction
of
the
Pentagon’s

roughly
trillion-dollar
annual
budget.

Nevertheless,
this
is
both
a
significant
investment
in
itself
and
a
sign
of
larger
trends.

Reformers
in
Congress
have
long
pushed
the
Pentagon
to
look
beyond
the
traditional
defense
industrial
base
and
seek
better,
cheaper
options
from
commercial
industry,
especially
for
IT.
Obama’s
last
Secretary
of
Defense,
Ash
Carter,
created

the
Defense
Innovation
Unit
as
the
military’s
embassy
in
Silicon
Valley.
And
Trump’s
new
Pentagon
chief,
Pete
Hegseth,
has
issued
sweeping
directives
to
expand
purchases
of
commercial
tech
from

software
to

drones.

Updated
4:40
pm
with
Grok
For
Government
announcement.