The U.S. defense and homeland security departments have paid $700 million for AI projects since ChatGPT’s launch
U.S. defense and security forces are stocking up on artificial intelligence, enlisting hundreds of companies to develop and safety test new AI algorithms and tools, according to a Fortune analysis.
In the two years since OpenAI released the ChatGPT chatbot, kicking off a global obsession with all things AI, the Department of Defense has awarded roughly $670 million in contracts to nearly 323 companies to work on a range of AI projects. The figures represent a 20% increase from 2021 and 2022, as measured by both the number of companies working with the DoD and the total value of the contracts.
The Department of Homeland Security awarded another $22 million in contracts to 20 companies doing similar work in 2022 and 2023, more than triple what it spent in the prior two-year period.
Fortune analyzed publicly available contract awards and related spending data for both government agencies regarding AI and generative AI work. Among the AI companies working with the military are well-known tech contractors such as Palantir as well as younger startups like Scale AI.
While the military has long supported the development of cutting-edge technology including AI, the uptick in spending comes as investors and businesses are increasingly betting on AI’s potential to transform society.
The largest DOD contract that specifies AI since fiscal year 2023 is the $117 million paid to ECS, a subsidiary of ASGN Inc, an IT management and consulting company. The contract is for a “research and development effort to design and develop prototypes to artificial/machine learning algorithms” for the U.S. Army. However, the overall contract amount set to be paid has grown beyond the initial award amount to $174 million, according to online records.
The next largest DOD contract was paid to Palantir at $91 million for the company to “test an end-to-end approach to artificial intelligence for defense cases” also for the Army. While Palantir earlier this year received a contract potentially worth $480 million over the next five years to expand military access to its Maven Smart System, a data visualization tool, the DOD does not specify it in government records as related to AI or generative AI. The contract is also an IDV, and is therefore cataloged separately from regular government contract awards. The only current delivery order under this IDV is for $70 Million for Palantir to create a new “user interface/user experience” for the Maven system.
The DOD has another 83 active contracts with various companies and entities for generative AI work and projects that are specified as “indefinite delivery vehicles,” or IDV, meaning the work ordered and delivery timetables are subject to change. The potential amount of those awards individually range from $4 million to $60 million. Should these additional contracts all be paid out at even a few million dollars each, the department will spend well in excess of $1 billion on hundreds of AI projects at as many companies by next year.
One such IDV is with Scale AI and potentially worth $15 million in payments from DOD for testing and evaluation of AI tools for the U.S. Army. Scale is a “preferred partner” of OpenAI and its investors include Thrive, a major backer of OpenAI, as well as Amazon, Meta and several others.
A spokesman for the DOD declined to comment. A representative of the DHS did not respond to an email seeking comment.
Two more contracts being paid out are $33 million going to Moresecorp Inc. and $15 million going to Mile Two LLC. Morsecorp, a company focused on autonomous vehicle technology, is doing testing and evaluation “for the exponential pace of artificial intelligence/machine learning” for the Army. Mile Two builds software and is creating “artificial intelligence enhanced workflows” for the Air Force. The majority of the contract awards range from $1 million to $10 million, although there are dozens under $500,000.
The largest DHS contract is substantially smaller at $4 million going to the marketing firm LMD for unspecified “marketing and artificial intelligence services” for the U.S. Coast Guard. The same firm is responsible for the “If you see something, say something” campaign produced through the DHS. LMD has a second contract worth $3 million for similar services. Two additional contracts each amounting to more than $3 million have also been paid to Noblis Inc., a tech consulting and analytics firm, to do AI analytics and support for the Office of Procurement Operations.
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