AI Daily: Google, OpenAI awarded DoD contracts with $200M ceiling

Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly:

DOD CONTRACTS: Microsoft (MSFT)-backed OpenAI, Google (GOOGL), Anthropic, and Elon Musk’s xAI have each won Department of Defense contracts with a $200M ceiling, aimed at enabling agentic AI national security workflows, Reuters reports.

CHIP SALES: Nvidia (NVDA) CEO Jensen Huang said the company is filing applications to sell H20 graphics processing units again in China. The U.S. government has assured Nvidia that licenses will be granted, and the company hopes to start deliveries soon, it announced in a statement on its website.

AI MODEL: Meta’s (META) superintelligence lab has discussed making changes to the company’s AI strategy, in what could become a major shake-up at the company, Eli Tan of The New York Times reports. Last week, a small group of top members of the lab discussed abandoning the company’s most powerful open source AI model, Behemoth, in favor of developing a closed model, two people with knowledge of the matter said, according to the Times.

GEN AI INNOVATION CENTER: In an AWS Blog post, Amazon (AMZN) stated, “When we launched the AWS Generative AI Innovation Center in 2023, we had one clear goal: help customers turn AI potential into real business value. We’ve already guided thousands of customers across industries from financial services to healthcare-including Formula 1, FOX, GovTech Singapore, Itau Unibanco, Nasdaq, NFL, RyanAir, and S&P Global-from AI experimentation to full-scale deployment, driving millions of dollars in productivity gains and transforming customer experiences. Now, as AI evolves toward more autonomous, agentic systems, we’re announcing an additional $100 million investment in the AWS Generative AI Innovation Center to help customers pioneer this next wave of AI innovation.”

TOP AI WINNER: Jefferies analyst Brent Thill is “very positive” on Microsoft (MSFT) following the firm’s survey of 40 enterprises indicating that Copilot could drive more than $11B in revenue in calendar 2026, and Copilot is fueling Azure and Security spend, the analyst tells investors in a research note. The firm says 80% of the respondents expect Microsoft’s budget to increase in 2026 and believes it is a top AI winner. Jefferies has a Buy rating and $600 price target on the shares.