[Companies & Issues] OpenAI Reinvents Itself as a Defense Stock... Why Company Executives Joined the U.S. Military

First $200 Million Contract with U.S. Department of Defense
OpenAI, Meta, and Palantir Executives Enlist in the Military
Military AI Active in Middle East Conflicts... Market Expansion

Reuters Yonhap News

Following Palantir, Meta, Google, and Microsoft (MS), OpenAI has signed a contract with the U.S. Department of Defense to develop military artificial intelligence (AI). In addition, current and former executives have enlisted in the military to participate in the development of new military AI, raising expectations that the scope of military AI applications will expand from daily military life to combat operations.

OpenAI Signs Contract with U.S. Department of Defense... First Step in Military AI Development

AP Yonhap News

On June 16 (local time), OpenAI signed a contract worth $200 million (about 270 billion won) with the U.S. Department of Defense to develop military AI. This is the first time OpenAI has signed a contract with the Department of Defense. The contract period runs until July of next year, but neither the Department of Defense nor OpenAI has disclosed details about the specific programs to be developed.

The Department of Defense stated, "With this contract, OpenAI will develop prototypes of cutting-edge AI capabilities to address critical national security challenges in both combat and institutional sectors." OpenAI had previously announced in December last year that it had formed a partnership with defense contractor Anduril Industries and would join a project to enhance the U.S. military's drone defense capabilities.

Currently, most major AI and big tech companies are entering the defense sector. Palantir, which has grown into a security-focused AI company, is working with the U.S. Army on a $1 billion AI and data project. MS is developing a customized version of its in-house AI chatbot, Copilot, for delivery to the Department of Defense. Meta Platforms, the parent company of Facebook, is also developing AI equipment for the U.S. military.

OpenAI, Meta, and Palantir Technology Executives Enlist in U.S. Army... New Detachment Established

On the 13th (local time), the U.S. Army Reserve's Detachment 201 was established and held an enlistment ceremony. Four current and former executives from OpenAI, Palantir, and Meta Platforms enlisted as majors. U.S. Army Reserve website

On June 13, the U.S. Army launched The Army's Executive Innovation Corps and established Detachment 201. Members of Detachment 201 include Kevin Weil, Chief Product Officer (CPO) of OpenAI; Shyam Sankar, Chief Technology Officer (CTO) of Palantir; Andrew Bosworth, CTO of Meta Platforms; and Bob McGrew, former Head of Research at OpenAI.

The U.S. Army emphasized that "the enlistment of technology experts is part of an Army transformation plan to make the military smarter and stronger by integrating private sector know-how into the armed forces." These executives will serve part-time in the Army while maintaining their current jobs, and will be allowed to work remotely or from home depending on circumstances. Their primary duties include training soldiers on how to use AI systems, conducting projects such as improving physical fitness using health data, and generating new ideas for AI development.

The Wall Street Journal (WSJ) commented, "Collaboration between Silicon Valley and the military will not only arm the armed forces with cutting-edge technology but also contribute to technological advancement," adding, "The deep ties between the two groups could help prepare for future warfare."

Military AI Plays Major Role in Middle East Conflicts... Spreading Worldwide

In January last year, Isaac Herzog, President of Israel (center), is seen meeting with Peter Thiel, Chairman of the Board of Palantir (left), and Alex Karp, CEO of Palantir. Since the introduction of Palantir's artificial intelligence (AI) technology, the interception capability of the Israeli military is widely regarded to have significantly improved. Palantir website

With AI reportedly playing a significant role in the conflict between Israel and Iran, the military AI market is expected to expand further. According to CNN, in January last year, Palantir signed a strategic partnership agreement with Israel and exported its Artificial Intelligence Platform (AIP). This platform is an AI program that analyzes data and movements of operational targets or individuals marked for elimination to produce optimized battle plans.

The platform was initially introduced in a limited way by the Israeli military after the outbreak of the Israel-Hamas war in October 2023, and has since seen widespread use. It is believed that the Israeli military used Palantir's AIP in the recent Iranian airstrike operation, including the assassination of more than 20 high-ranking Iranian officials, such as those at the Natanz nuclear facility, nuclear scientists, and military commanders.

The U.S. military is also undergoing structural reforms based on the introduction of AI. According to The New York Times (NYT), the U.S. Army plans to eliminate 1,000 positions with weakened functions as part of its adoption of AI technology. The military aims to optimize its force structure by reducing 20% of four-star generals across the Army, Air Force, Marine Corps, Space Force, and Navy, and plans to consolidate and reorganize commands in the future.

At a press conference in April, Bianca Herlory, the Joint Staff AI Chief of the U.S. Army, stated, "AI is more than just a technological adoption; it is a means to enhance the speed and accuracy of commanders' decision-making in real time," emphasizing, "AI is no longer an experimental technology but a core part of operations, and it is already integrated into everyday military activities."

Not only the United States but also China is accelerating the adoption of military AI technology. Recently, the South China Morning Post (SCMP) reported that Shenyang Aircraft Design and Research Institute, one of China's state-owned fighter jet manufacturers, has begun using the country's generative AI platform, DeepSeek, in fighter jet design. The People's Liberation Army of China is also developing military AI using DeepSeek this year.