According to Fox News AI, the Pentagon has issued an ultimatum to an artificial intelligence firm to lift contractual limits on military use by Friday or lose a $200 million deal, citing national security needs and operational flexibility (as reported by Fox News). The development signals rising demand for dual‑use AI tools in defense procurement and could reshape compliance terms for foundation models and model-as-a-service offerings across DoD programs, according to Fox News. For AI vendors, the near-term business opportunity lies in clarifying acceptable use policies, export controls, and deployment guardrails to meet defense accreditation while preserving safety commitments, as reported by Fox News.