OpenAI has partnered with Leidos Holdings (NYSE: LDOS) to deploy artificial intelligence across federal government operations tied to national priorities, according to a Thursday press release.
The companies said the arrangement aims to improve efficiency inside agencies responsible for national security, defense, infrastructure, and related functions.
Additionally, the release framed the effort as a move to transform how federal operations run by embedding AI tools into everyday workflows. With an estimated market capitalization of about USD$24 billion, Leidos operates as a major government contractor with little public-facing brand presence.
The company resembles legacy technology giants such as Oracle (NYSE: ORCL), firms long favored by institutional buyers rather than consumers. However, Leidos has built its reputation by managing procurement, logistics, and software integration across complex federal systems.
Under the new partnership, OpenAI will integrate its products into Leidos-managed government workflows. Additionally, the focus includes defense programs, critical infrastructure projects, and other high-security environments. Leidos chief technology officer Ted Tanner said the companies plan to use AI to help agencies work faster and operate more effectively.
Leidos already sits deep inside the federal bureaucracy, particularly in navigating aging software platforms. Those systems drew attention last year when budget-cutting efforts under the Department of Government Efficiency, known as DOGE, exposed widespread inefficiencies. Meanwhile, Leidos largely avoided serious damage during that period.
DOGE initially announced the cancellation of a Leidos contract valued at USD$1 billion. Subsequently, officials reversed course and reassessed the canceled work at just USD$560,000. A Leidos spokesperson later said the company supported efforts to make government operations cheaper and more effective for taxpayers.
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Leidos and OpenAI have launched OpenAI for Government
Additionally, Leidos has emphasized its close ties with the Department of Homeland Security. In a 2023 statement, Roy Stevens, president of the company’s Homeland Sector, described a strong working relationship with DHS. He said Leidos supported intelligence sharing and secure collaboration across civilian and federal agencies.
That work, according to the company, helps DHS carry out its mission of protecting the homeland. However, DHS also oversees agencies such as Homeland Security Investigations, Customs and Border Protection, and Immigration and Customs Enforcement.
Before the Leidos deal, OpenAI had already launched an initiative called OpenAI for Government. In addition, the company disclosed a Pentagon contract with a ceiling of USD$200 million tied to that program. Earlier government customers included U.S. National Labs, the Air Force Research Laboratory, NASA, the National Institutes of Health, and the Treasury Department.
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