According to Reuters, the U.S. Department of Defense said in a statement on Monday that it has awarded OpenAI a $200 million contract to develop advanced AI capabilities for national security.

“Under this contract, the contractor will develop cutting-edge AI technology prototypes to address key national security challenges in the combat and defense enterprise sectors,” the U.S. Department of Defense said in a statement. The contract was awarded to OpenAI Public Sector LLC, a public sector subsidiary of OpenAI.

The U.S. Department of Defense said the work will be primarily carried out in and around Washington and is expected to be completed in July 2026. The Department of Defense’s Chief Digital and AI Office in Washington, D.C., is responsible for overseeing the execution of the contract, and the department has allocated nearly $2 million in funds for research, development, testing and evaluation for the initial phase of the project.

The agreement is a significant defense contract for OpenAI’s public sector as the U.S. government continues to increase its investment in advanced AI technology for national security.

OpenAI said last week that its annualized revenue soared to $10 billion as of June this year, and it is expected to achieve its full-year revenue target.