OpenAI has landed a $200 million contract with the U.S. Department of Defense, marking a pivotal shift in its business as the company formally enters the lucrative defense technology sector.

The one-year agreement, announced Monday, tasks OpenAI with building prototype “frontier AI” capabilities to support U.S. military operations and internal government functions—a move that underscores how national defense has become a key frontier for artificial intelligence firms seeking growth beyond commercial applications.

This is the first contract with OpenAI listed on the Pentagon’s procurement database and comes at a time when U.S. military agencies are racing to incorporate cutting-edge AI tools into both battlefield strategy and back-office operations. The agreement is being executed under a newly launched initiative, OpenAI for Government, which includes OpenAI’s public-sector-tailored ChatGPT Gov product.

“Under this award, the performer will develop prototype frontier AI capabilities to address critical national security challenges in both warfighting and enterprise domains,” the Department of Defense said in its official contract notice.

From Research Lab to Military Contractor

Founded as a nonprofit research organization, OpenAI has undergone a dramatic transformation in recent years. With soaring commercial demand for its generative AI models and deepening ties to Microsoft, the company is now expanding its reach into defense, healthcare, finance, and enterprise productivity. But this deal with the Pentagon marks perhaps the clearest signal yet that OpenAI is not just a tech company but an emerging contractor in America’s trillion-dollar defense apparatus.

“This contract… will bring OpenAI’s industry-leading expertise to help the Defense Department identify and prototype how frontier AI can transform its administrative operations—from improving how service members and their families get healthcare, to streamlining how they look at program and acquisition data, to supporting proactive cyber defense,” OpenAI said in a blog post.

The $200 million ceiling, while modest relative to the scale of Pentagon procurement, is expected to be just the beginning. With the U.S. defense budget topping $800 billion annually, and artificial intelligence now seen as a core asset in military competitiveness, analysts believe OpenAI is well positioned to secure a larger share of government AI spending in the years ahead.

Military Spending Offers Path to Close Revenue Gap

While OpenAI has surged in popularity thanks to ChatGPT and enterprise licensing deals, the company is still in an aggressive expansion phase. It currently generates more than $10 billion in annualized revenue but faces mounting infrastructure costs and competition in both consumer and enterprise markets. Defense contracts like this one offer a new—and highly stable—revenue stream that could help close the company’s capital gap as it pursues longer-term dominance in AI development.

Competitors like Anthropic have already entered the race. In December, Anthropic announced a collaboration with Palantir and Amazon to deliver AI solutions to defense and intelligence agencies. Around the same time, Anduril Industries—OpenAI’s defense tech partner—secured a $100 million Pentagon contract, further indicating that the military sector is fast becoming a core market for AI innovation.

OpenAI CEO Sam Altman, speaking in April alongside OpenAI board member and former NSA director Paul Nakasone, made it clear that the company sees national security not as an obligation, but as a strategic mission.

“We have to and are proud to and really want to engage in national security areas,” Altman said during a public event at Vanderbilt University.

The new OpenAI for Government initiative is designed to cater to this strategy. It offers U.S. agencies access to customized AI models, implementation support, and roadmap insights tailored to defense needs. OpenAI emphasized that all applications under the defense contract will remain within the boundaries of its usage policies—though the company did not specify how oversight or enforcement would work in highly classified environments.

From the White House to the War Room

The contract announcement comes on the heels of OpenAI’s participation in the Stargate Project, a $500 billion U.S.-based AI infrastructure initiative announced in January by Altman alongside President Donald Trump at the White House. The project, aimed at building large-scale computing power within the U.S., positions OpenAI at the center of Washington’s push to outpace China and other geopolitical rivals in artificial intelligence capabilities.

Meanwhile, Microsoft, which provides OpenAI’s cloud infrastructure, has secured clearance from the Defense Information Systems Agency (DISA) to handle classified data through its Azure OpenAI service. This regulatory green light further strengthens OpenAI’s credentials as a trusted partner for national security work.

As AI reshapes industries from finance to healthcare, its deepening role in military and intelligence operations signals a profound change in how technology companies relate to the state. What was once the domain of traditional defense contractors is now being populated by Silicon Valley’s most powerful AI labs.

I smile: “The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has once again raised concerns over the growing influence of the Dangote Refinery in Nigeria’s downstream petroleum sector, warning that the company’s forward integration strategy could lead to monopolistic control, threaten thousands of jobs, and cripple small players across the fuel value chain.

“On June 15, Dangote Refinery announced it would begin nationwide distribution of diesel and premium motor spirit (PMS), commonly known as petrol, starting August 15. With a daily refining capacity of 650,000 barrels, it is the largest refinery in sub-Saharan Africa, and many had initially welcomed the move as a long-awaited breakthrough in Nigeria’s fuel-sufficiency efforts.”

The wailing has started. Before you know it, no one will remember how bad it was before Dangote Refinery was born. Yes, a monopolistic has received the refining sector from the gods of Nigeria, free! Nothing like that: Nigeria needs efficient supply chain and competition is the only way to make that happen since the governments at all levels are severely underfunded to deliver platforms of commerce.

Every economy needs big companies especially when governments do not show up. Before the Central Bank of Nigeria had its mojo, the First Bank of Nigeria acted as banks’ bank, clearing cheques for other banks, with the same authority you would have expected from an apex bank.

What the government should focus on is creating smart regulations and not going after big companies. Think of it: before CBN had zonal offices, First Bank ran the zones but was required to support other banks. And First Bank did and everyone was fine.

So, as Dangote expands, we can ask it to open its networks so that qualified trucks can participate, making sure those who want to work stay at work. But we must not be intimidated by associations.  Nigeria needs railway investors, postal system investors and broad investors in platforms of commerce for the economy to have any chance, as you need those investors for entrepreneurs to plant companies on them.

Petrol Marketers Warn of Dangote Refinery’s Threat to Jobs, Market Competition, Analyst Dismisses Fears

More than a decade after acquiring WhatsApp for $19 billion, Meta has finally begun injecting ads into the once ad-free messaging app, shattering a core promise made at the time of the purchase.

The move marks a sharp shift in Meta’s strategy. It underscores its growing dependence on advertising — the company’s financial backbone — even at the cost of abandoning commitments that were once central to user trust and the app’s identity.

Announced Monday, Meta said businesses can now run “status ads” in WhatsApp’s Updates tab, the space used by users to post images, text, and videos that disappear after 24 hours — similar to Instagram Stories. These ads won’t interfere with private conversations, which Meta says remain end-to-end encrypted.

But the development signals a clear departure from WhatsApp’s founding philosophy and a monetization model that had long stood apart from the rest of Meta’s portfolio.

Meta will also begin monetizing WhatsApp’s Channels feature, allowing channel owners — including organizations, influencers, and public figures — to boost their visibility via paid placements in search results. In addition, administrators can charge monthly subscription fees for access to exclusive content, although Meta will take a 10% cut from these fees at a later date.

A Broken Promise

When Facebook (now Meta) acquired WhatsApp in 2014, it did so under unusual terms. WhatsApp’s founders, Jan Koum and Brian Acton were staunchly opposed to advertising, calling it a violation of user privacy. The duo insisted that their platform was to remain ad-free, and this position was written into parts of the acquisition agreement to ensure that Meta would respect the app’s original values.

But as Meta grew more dependent on advertising revenue — which made up over 97% of its income by 2023 — pressure mounted to monetize WhatsApp, especially as other Meta platforms like Facebook, Instagram, and more recently Threads, were saturated with ads.

That pressure ultimately drove both Koum and Acton to leave the company, reportedly after a series of internal clashes with executives over the future of WhatsApp. Acton, who later founded the encrypted messaging app Signal, publicly criticized Meta, saying, “I sold my users’ privacy.”

Despite their departure, WhatsApp’s popularity soared, surpassing 3 billion monthly users globally. But its revenue remained a fraction of Meta’s overall earnings, estimated between $500 million and $1 billion annually — mainly from charging businesses for customer service tools.

Now, with these changes, WhatsApp joins Meta’s other platforms in the company’s larger plan to extract more commercial value from its vast user base. The new status ads, as well as click-to-message campaigns that already run on Facebook and Instagram and direct users to WhatsApp, are being positioned as a new revenue pillar.

“Messaging between brands and consumers should be the next pillar of our business,” CEO Mark Zuckerberg told analysts in April.

Why Now?

Meta says the new monetization approach is designed to be subtle. According to Nikila Srinivasan, Meta’s head of product for business messaging, ads will only appear in the Updates tab — not in personal chat threads or call logs — and targeting will rely on “very basic information” like device, language, city, or user interactions with ads.

But the timing isn’t accidental. Meta is under increasing pressure from investors to diversify revenue sources and maintain growth as its core social media platforms face saturation and regulatory headwinds. The company is also locked in a high-profile antitrust battle with the U.S. Federal Trade Commission, which has challenged its acquisitions of WhatsApp and Instagram on the grounds that they were intended to eliminate competition.

For years, WhatsApp was seen as an anomaly — a rare tech giant product that grew without relying on user data for ads. That exception is now over. And for many, the decision to monetize WhatsApp is not just a business strategy — it’s a betrayal of the very principles that built the app’s global credibility.

Meta, for its part, hopes to limit the backlash by avoiding ad overload. “We really believe that the Updates tab is the right place for these new features,” Srinivasan said.

But with WhatsApp’s original founders long gone, and the platform’s founding ideals clearly overwritten, Meta appears free to break even its most sacred promises — especially as advertising is involved.