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

Defense contracts are usually a slow grind through paperwork and patience. Code Metal just got a very different version of the story: an $80 million Pentagon deal to modernize and AI-enable WarMatrix, the Department of War’s wargaming simulation environment, in less than 12 months.

The company had already secured $17 million for the initial operating capability, the minimum version that can be usefully deployed. After that, the Pentagon moved to fund the rest through an Other Transaction Authority agreement. CEO Peter Morales said he had “never seen them move this fast,” and for defense procurement that counts as a genuine speedrun.

Code Metal sits in a useful niche. It uses AI to translate code across programming languages and check that it works on different hardware, which is exactly the sort of plumbing that can keep old military software alive without forcing everything to be rebuilt from scratch. Morales said the idea is not to replace decades of validated code, but to make it usable by warfighters and by AI tools. The company’s work on WarMatrix is expected to turn analyses that once took months into work that can be done in days.

Morales knows the gap between military systems and commercial software from the inside. Before Code Metal, he spent about a decade in hardware and software roles at BAE Systems, MIT’s Lincoln Laboratory, and Microsoft. He said that experience, including work on software and real-time systems for the F-35, showed him how quickly military tech can lag behind the commercial world.

About 75% of Code Metal’s business is defense-related already, and the company has worked with the U.S. Air Force, Raytheon, L3Harris, and Boeing. It is also trying to turn this into something repeatable, not just a lucky break. The company has 123 employees, brought in Ryan Aytay earlier this year as president and COO, and is now looking to convert one-off wins into a bigger business. That matters, because defense startups can raise huge rounds and still remain a rounding error in Pentagon spending.