OpenAI’s $200M DoD contract could squeeze frenemy Microsoft

OpenAI mentioned Monday the U.S. Division of Protection granted it a contract for as much as $200 million to assist the company establish and construct prototype programs that use its frontier fashions for administrative duties and extra.

OpenAI offers a couple of examples of attainable tasking, similar to serving to service members get healthcare, streamlining information on numerous packages, and “supporting proactive cyber protection.” The corporate additionally mentioned that “All use circumstances should be in line with OpenAI’s utilization insurance policies and pointers.” 

The DoD’s announcement used barely extra easy wording. It says, “Underneath this award, the performer will develop prototype frontier AI capabilities to deal with important nationwide safety challenges in each warfighting and enterprise domains.”

Whether or not that reference to war-fighting applies to the weapons themselves or simply different areas related to wars, like paperwork, stays to be seen. OpenAI’s pointers do forbid particular person customers to make use of ChatGPT or its APIs to develop or use weapons. Nevertheless, OpenAI deleted the express prohibitions of “navy and warfare” in its phrases of service again in January, 2024.

Given how closely some highly effective individuals in Silicon Valley have warned of the hazards of China’s superior LLM fashions, it’s not stunning the DoD desires to make use of OpenAI for no matter functions it desires. For example, Marc Andreessen, co-founder of VC agency Andreessen Horowitz, an OpenAI investor, just lately appeared on Jack Altman’s “Uncapped” podcast (brother of Sam Altman). Andreessen described the race between China’s AI and the western world’s models as a “cold war.”

Nonetheless, maybe an equally attention-grabbing a part of this announcement is what it says about OpenAI’s increasingly strained relationship with its major investor Microsoft.

Microsoft has thousands of contracts with the federal authorities price lots of of hundreds of thousands of {dollars}. It has, for many years, been implementing the strict safety protocols obligatory for the federal government – particularly the DoD – to make use of its cloud. 

OpenAI introduced this deal as a part of its broader new “OpenAI for Authorities” program, which consolidates quite a few different packages it makes use of to promote wares on to authorities businesses, together with the U.S. Nationwide Labs⁠, the Air Power Analysis Laboratory, NASA, NIH, and the Treasury, in line with the corporate.

However it was solely in April that Microsoft announced the DoD had accredited its Azure OpenAI Service for all categorised ranges. Now the DoD can be going straight to the supply. From Microsoft’s perspective: ouch.

Neither OpenAI nor Microsoft instantly responded to a request for remark.