Yea, joke is on us, because they'll still develop the thing they told the pentagon they would develop, all while appearing to be 'good guys' to people (which is apparently quite a few people) who don't understand how contracts work.
What stops Google from forming a shell corp to handle government contracts? They can profit off the shell corp while allowing them unfettered, royalty free access to their internal technology. They can staff the shell corp with smart people who aren't anti-government, and even continue to employ them at Google so no one knows what's going on.