VA Bets $1.6 Billion on Salesforce AI Agents Amid Pentagon Vendor Shuffle
AI-generated image · US National Wire
The Department of Veterans Affairs is deploying an 'army' of AI agents via a massive Salesforce contract, even as Oracle secures a separate DoD win worth nearly $7 billion.
The U.S. Department of Veterans Affairs (VA) is placing a massive bet on autonomous software, awarding Salesforce a $1.6 billion, three-year contract. According to reporting from The Register, the deal centers on an Agentic Enterprise License Agreement (AELA) designed to integrate agentic AI, advanced collaboration tools, and data across the department to alleviate administrative burdens for employees.
Kendall Collins, CEO of Salesforce's defense and government unit, stated that the goal is to reduce the time employees spend navigating disconnected systems, thereby increasing the time available to serve Veterans. The contract will support several high-profile initiatives, including an 'agentic operating system' utilizing Slack—which is already active in certain VA hospitals—and a 24/7 'virtual contact center.' This center will embed AI agents into existing workflows to automate benefits verification, triage cases, and retrieve data during live calls.
However, the financial structure of the AELA has drawn scrutiny. The Register notes that Gartner previously warned such seat-based arrangements might eventually transition into defined quantity contracts as unchecked usage drives up costs. Salesforce has denied these claims, asserting that renewals will remain flexible and the company will not move away from capped plans.
This move comes as the VA continues to navigate a complex relationship with Oracle. The Register reports that Oracle is currently implementing a new electronic health record system for the VA under a $9.99 billion agreement signed in 2018. That project faced a temporary suspension in April 2023 due to patient safety concerns before being rebooted in February 2025.
While Oracle missed out on the VA's AI agent contract, the company is diversifying its footprint within the broader defense apparatus. The Register reports that the U.S. Department of Defense signed a separate Enterprise Software Agreement (ESA) with Oracle this week. This deal is valued at nearly $7 billion over a potential ten-year period. The Department of Defense estimates that by consolidating fragmented, one-off purchases under this single agreement, taxpayers will save at least $441 million over the contract's lifetime.