Code Metal lands $80 million Pentagon deal to modernize military wargaming

Preston Fore reports on a groundbreaking $80 million Pentagon contract secured by Boston-based software company Code Metal. The deal, exclusive to Fortune, pertains to the modernization and AI integration of the Department of War's wargaming simulation environment, WarMatrix. Code Metal CEO Peter Morales expressed his excitement over the rapid acquisition of the contract, which took less than a year, surpassing the typical bureaucratic timeframe.

Upon securing $17 million for the initial operating capability, the company received full funding as an Other Transaction Authority (OTA) agreement. Code Metal, valued at $1.25 billion in February 2025, specializes in AI-powered software to transition code across programming languages and ensure hardware compatibility. The company's CEO highlighted that the new contract enables analyses that previously took months to be accomplished in days.

Morales, who previously worked at BAE Systems, MIT's Lincoln Laboratory, and Microsoft, emphasized the importance of preserving decades of validated technology while making it compatible with newer tools like AI. Code Metal's success follows the surge in defense-tech startups, with 10,000 new companies entering the market over the past two years.

The rapid deployment of $19.8 billion in venture capital into defense tech in the first quarter of 2026 further fuels the sector's growth. However, with only 1% of total defense contractor dollars currently allocated to these startups, the challenge lies in translating such one-off opportunities into scalable, repeatable business models.

To tackle this, Code Metal recently added Ryan Aytay as president and COO, bringing in sales and scaling expertise from Salesforce and Tableau.