Alphabet (GOOGL) Stock Rises as Google Signs Classified AI Deal With Pentagon

TLDR

• Google has signed a classified AI deal with the U.S. Department of Defense, joining OpenAI and xAI
• The deal allows the Pentagon to use Google’s AI for “any lawful government purpose”
• Safety filters are included, but Google cannot veto lawful government decisions
• The contract excludes domestic mass surveillance and autonomous weapons without human oversight
• Anthropic was previously labeled a supply-chain risk after refusing to remove similar guardrails

Google has secured a deal with the U.S. Department of Defense to provide AI models for classified use, according to a report from The Information published Tuesday.

The agreement puts Google alongside OpenAI and Elon Musk’s xAI, both of which have existing contracts to supply AI to classified Pentagon networks.

GOOGL stock was up 1.72% following the news.

Alphabet Inc., GOOGL

The Pentagon signed deals worth up to $200 million each with major AI labs back in 2025, covering Anthropic, OpenAI, and Google.

Classified networks handle sensitive operations including mission planning and weapons targeting.

What the Deal Covers

Under the terms, the Pentagon can use Google’s AI for “any lawful government purpose.”

Google is required to help adjust its AI safety settings and filters at the government’s request.

The contract includes language ruling out use for domestic mass surveillance or autonomous weapons without appropriate human oversight.

However, Google does not get the right to control or veto lawful government operational decisions.

A Google spokesperson said the company “remains committed to the consensus that AI should not be used for domestic mass surveillance or autonomous weaponry without appropriate human oversight.”

Anthropic’s Warning Story

The deal comes after a well-publicized fallout between Anthropic and the DoD earlier this year.

Anthropic refused to remove guardrails preventing its AI from being used for autonomous weapons or domestic surveillance.

The Pentagon responded by designating Anthropic a supply-chain risk — a clear signal to other AI firms about what non-compliance could look like.

Google’s deal appears to reflect a more flexible stance on those guardrails.

The Pentagon has publicly stated it has no interest in mass surveillance of Americans or weapons without human involvement, but has pushed to allow “any lawful use” of AI on its networks.

The U.S. Department of Defense — now renamed the Department of War by President Donald Trump — did not immediately respond to requests for comment. Reuters could not independently verify the report.

Google confirmed it supports government agencies on both classified and non-classified projects.

A Washington Post report published Monday revealed that hundreds of Google employees had signed a petition to CEO Sundar Pichai urging the company to reject classified AI work with the Pentagon.

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