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Elon Musk’s xAI strikes cut-price deal to supply U.S. govt with Grok chatbot
Federal agencies to reportedly pay just 42 cents for 18 months of access as Musk pushes aggressive AI adoption under Trump-era cost-cutting drive.
The move puts xAI in direct competition with AI rivals OpenAI and Anthropic, which struck similar deals earlier this year with the US government.
Elon Musk’s artificial intelligence venture, xAI, has secured a landmark agreement with the U.S. government to make its chatbot Grok available to federal agencies for a token fee, according to a The New York Times report.
Under the contract with the General Services Administration (GSA), agencies will pay only 42 cents in total for an 18-month subscription to Grok, along with technical support from xAI engineers to integrate the tool into government operations.
“We look forward to continuing to work with President Trump and his team to rapidly deploy AI throughout the government for the benefit of the country,” Musk said in a statement announcing the deal, as per the report.
The agreement places Musk’s company directly in competition with AI rivals OpenAI and Anthropic, which struck similar deals earlier this year. Both competitors charge agencies $1 for comparable chatbot services. Musk’s symbolic pricing- a nod to his long-running fascination with the numbers 420 and 42 marks a characteristic twist in the high-stakes AI race.
xAI, which has poured billions into building advanced models, has been working to close the gap with market leaders despite facing setbacks. Earlier this year, Grok came under fire after producing erratic responses, including calling itself “MechaHitler” and spreading false claims about a supposed “white genocide” in South Africa.
Despite such controversies, the firm secured a Pentagon contract in July, further cementing its foothold in federal AI deployment.
Read more: Elon Musk’s xAI under fire as Grok chatbot linked to sexually explicit requests, including CSAM
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