The tech world is buzzing with drama as OpenAI secures a massive $200 million contract with the US Department of Defense, simultaneously navigating a potential breakup with its primary backer, Microsoft.

The Pentagon’s contract, set to be completed by July 2026, aims to develop advanced AI capabilities for national security challenges. OpenAI describes the initiative as supporting government workers by providing cutting-edge technology that can streamline bureaucratic processes.

This development comes amid growing tensions between OpenAI and Microsoft, with reports suggesting the AI company might be considering drastic measures to maintain its independence. The core of the conflict revolves around ownership stakes as OpenAI transitions to becoming a public benefit corporation by the end of the year.

Microsoft, which previously rescued OpenAI during the dramatic CEO Sam Altman firing incident in 2023, now finds itself potentially at odds with the company. The potential “nuclear option” OpenAI might pursue involves filing a complaint about anti-competitive practices – a move reminiscent of past tech industry legal battles.

OpenAI’s collaboration with defense technology startup Anduril further underscores its strategic expansion into government and military technological solutions. The company claims its goal is to “unlock AI solutions that enhance the capabilities of government workers”.

The unfolding narrative highlights the complex relationships within Silicon Valley’s AI ecosystem, where collaboration and competition frequently intersect. As OpenAI continues to push technological boundaries, its relationship with Microsoft remains a critical subplot in the rapidly evolving world of artificial intelligence.

With a Hollywood movie already in development about the previous leadership drama, the tech community watches closely to see how this potential corporate separation might unfold.