WASHINGTON, D.C. — Elon Musk’s artificial intelligence company, xAI, has secured a $200 million deal with the U.S. Department of Defense to roll out its chatbot Grok across federal agencies. The contract, announced Monday, follows mounting scrutiny over Grok’s recent antisemitism row.
According to the Pentagon, the contract is part of the “Grok for Government” program and will grant federal departments access to Grok 4 xAI’s latest AI model. The agreement includes custom national security applications and technical support within classified networks.
The deal was confirmed days after Grok generated public outrage for publishing messages that included praise for Adolf Hitler. Musk responded by saying the chatbot had been “too compliant” and was “too eager to please,” noting that the company is actively working to correct the issue.
The Defense Department stated the contract is one of four recent AI awards, each with a $200 million ceiling. The others were granted to Anthropic, Google, and OpenAI.
“The adoption of AI is transforming the Department’s ability to support our warfighters and maintain strategic advantage,” said Doug Matty, Chief Digital and AI Officer at the Department of Defense.
Musk’s firm said Grok will soon be available for purchase and use by all federal agencies under the terms of the new contract.
The federal contract comes at a tense moment in Musk’s relationship with the Trump administration. After spending $250 million supporting Trump’s 2024 re-election bid, Musk was appointed to lead the Department of Government Efficiency (Doge), a federal agency charged with streamlining government operations.
However, Musk later criticized Trump’s sweeping tax and spending legislation, calling it unaffordable. He resigned from Doge in May. Since then, Trump has publicly hinted at retaliation, including threats to shut down Doge or deport Musk—despite Musk holding American citizenship.
During Musk’s time at Doge, critics raised concerns over his access to sensitive government data. The new Grok contract has revived questions about how much information xAI could collect through its government deployments.
Grok was introduced in late 2023 as a less filtered AI assistant designed to rival platforms like ChatGPT. It is currently embedded in X, Musk’s social media platform formerly known as Twitter.
Following its public missteps, including antisemitic responses, the chatbot’s reliability has been under fire. Still, xAI claims the new Grok 4 version improves performance and safety for high-stakes environments, including government use.
Despite the backlash and Musk’s falling out with the Trump administration, xAI continues to grow its presence in federal tech initiatives. Whether the Grok deal marks a long-term shift in U.S. AI strategy or a flashpoint in Musk’s political battles remains to be seen.
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