Code Metal secures $80 million Pentagon contract to AI-upgrade WarMatrix wargaming platform

Boston startup Code Metal has been awarded an $80 million contract by the Pentagon to modernize and add artificial-intelligence capabilities to WarMatrix, the Department of War’s long-standing wargaming simulation environment, with the entire procurement process completed in under a year. After securing $17 million for an initial operating capability, the firm received the remaining funds through an Other Transaction Authority agreement.

CEO Peter Morales explained that the upgrade will enable analyses that previously required months to be performed in days, while preserving decades of validated code. The company, valued at $1.25 billion following a $125 million Series B led by Salesforce Ventures, already derives about three-quarters of its revenue from defense work and collaborates with the Air Force, Raytheon, L3Harris and Boeing. Morales, who previously worked at BAE Systems, MIT Lincoln Laboratory and Microsoft, sees the partnership with traditional defense primes as complementary rather than competitive. The contract reflects a broader surge of venture-backed startups entering the defense sector, which has seen record VC investment and a tripling of Pentagon spending on such firms last fiscal year.