Leidos Forges AI Alliance with OpenAI to Transform Federal Operations
RESTON, Va., January 26, 2026 – Defense and technology giant Leidos Holdings Inc. (NYSE: LDOS) has entered a strategic partnership with OpenAI to integrate advanced artificial intelligence into core federal government workflows. The announcement, made on January 22, marks a significant push to move AI from experimentation to real-world deployment across national security, defense, health services, and infrastructure missions.
Strategic AI Integration
The collaboration will see Leidos deploy OpenAI’s generative and agentic AI models in secure configurations designed for government use. The goal is to enhance productivity, accelerate product development, and improve mission outcomes for agencies. Leidos Chief Technology Officer Ted Tanner stated the partnership aims to harness AI’s transformative power to improve federal agency operations, with a focus on secure data handling. Internally, thousands of Leidos employees will use tools like ChatGPT and the OpenAI API to accelerate tasks such as global threat assessments, supply chain monitoring, and deepfake detection.
Recent Government Contract Activity
Federal procurement records reveal sustained business activity for Leidos under a single master contract vehicle (GS35F116AA) with the Office of Procurement Operations. A review of 22 delivery orders awarded between December 2024 and January 2026 shows consistent funding for technology services.
| Period | Key Contract Obligations |
|---|---|
| Dec 2024 – Jan 2026 | 22 delivery orders issued under contract GS35F116AA. Notable obligated amounts include $1.7 million (Dec 5, 2024), $3.1 million (Dec 31, 2024), $1.8 million (May 5, 2025), $3.5 million (June 3, 2025), and $411,938 (Jan 9, 2026). Several orders were issued with $0 obligation, indicating contract modifications or future-funded work. |
| Recent Major Wins | Separately, Leidos secured a three-year, $127 million contract to continue administering Hawai’i’s Energy program (Dec 2025) and was named a winner on a massive, multi-company Defense Microelectronics Activity contract with a shared ceiling of $25.36 billion. |
Workforce Adjustment in Ashburn
In a related development, Leidos notified the state of Virginia of a planned layoff affecting 93 employees at its Ashburn, Virginia security operations center, beginning March 23. The company cited an upcoming recompete of a U.S. Customs and Border Protection contract, for which it is the incumbent, as the reason. The facility is not expected to close.
Financial Performance and Outlook
Leidos reported strong third-quarter fiscal 2025 results in November, with revenue of $4.47 billion, a 7% year-over-year increase. The company raised its full-year guidance, forecasting non-GAAP earnings per share between $11.45 and $11.75. Leidos will hold its fourth-quarter and full-year 2025 earnings conference call on February 17, 2026. The company’s stock (LDOS) closed at $191.23 on January 25, with a market capitalization of approximately $24.45 billion.
Frequently Asked Questions
What is the goal of the Leidos-OpenAI partnership?
The partnership aims to integrate OpenAI’s most advanced AI models into the core workflows of Leidos’ federal customers to improve efficiency, resilience, and mission outcomes in areas like digital modernization, national security, and health services.
Why is Leidos laying off workers in Ashburn?
The layoffs are related to the upcoming recompete of a U.S. Customs and Border Protection security operations contract. Leidos is the current contractor and is adjusting its workforce in anticipation of the contract transition.
When is Leidos’s next earnings report?
Leidos is scheduled to report its fourth-quarter and full-year 2025 financial results before the market opens on Tuesday, February 17, 2026. A conference call will be held at 8:00 a.m. Eastern Time that day.