I companies are fighting over the Pentagon’s favor.

Elon Musk-owned SpaceX and subsidiary xAI have thrown their hat into a secretive Pentagon contest for a $100 million contract to develop voice-powered autonomous drone swarms, Bloomberg reported on Monday. It marks xAI’s latest effort to collaborate with the government agency, as the AI lab recently signed a contract with the Pentagon to integrate Grok into government sites, as well as a $200 million contract to integrate its tech into military systems.

But the Musk-owned companies aren’t the only ones seeking Pentagon contracts. OpenAI is reportedly supporting Applied Intuition, an autonomous machines startup, with its own submission for the contest, Bloomberg reported.

However, the news comes as a rival’s relationship with the military is reportedly on the rocks: According to Axios, the Pentagon may cut ties with Anthropic over the company’s refusal to relax the safety restrictions in place on its flagship chatbot, Claude.

• The military is currently using Claude only for its classified systems. Though the company is willing to loosen some safety restrictions, it wants to ensure that its chatbot won’t aid the agency in surveillance of U.S. citizens or developing autonomous weaponry that can kill without human oversight.
• Defense Secretary Pete Hegseth is reportedly considering designating the company a "supply chain risk," forcing military contractors using Anthropic to also drop the company.

One senior official told Axios that the agency is “going to make sure they pay a price for forcing our hand like this." The Department of War’s spokesperson Sean Parnell told Axios that its relationship with Anthropic is “being reviewed.”

Anthropic’s tension with the Pentagon represents a stark reversal from its previous intentions. Anthropic, along with practically every other major AI company, sought to get in the government’s good graces last year by offering services at steep discounts to support early adoption.