The U.S. Department of Defense Just Cut a $200M Deal With Elon Musk’s Grok

Smartphone displaying Grok logo with blurred image of Elon Musk in the background
Algi Febri Sugita/ZUMA Press Wire

Summary:

  • Elon Musk’s Grok AI heads to Pentagon with $200 million contract and GSA listing. xAI apologizes for offensive outputs.

  • Grok for Government suite offers national security models and engineering teams, but faces criticism for offensive outputs.

  • Critics wary as Musk pushes Grok into public infrastructure, highlighting concerns over offensive outputs and lack of filters.

Elon Musk’s controversial AI brainchild, Grok, is headed to the Pentagon.

On Monday, xAI—the AI startup Musk launched to rival OpenAI—announcedGrok for Government,a new push to distribute its generative AI tools to federal agencies. This includes a fresh $200 million ceiling contract with the U.S. Department of Defense and a listing on the General Services Administration (GSA) schedule, making Grok officially purchasable across every branch of government.

The announcement, dropped via a post on X (naturally), positions Grok as part of the federal AI stack, joining recent efforts by OpenAI and Anthropic to court government dollars. But the timing raises eyebrows: just days ago, xAI issued a public apology for Grok’s offensive and antisemitic outputs, calling themunacceptableand vowing to improve safety protocols.

“The adoption of AI is transforming the Department’s ability to support our warfighters and maintain strategic advantage over our adversaries,” said Chief Digital and AI Officer Dr. Doug Matty. “Leveraging commercially available solutions into an integrated capabilities approach will accelerate the use of advanced AI as part of our Joint mission essential tasks in our warfighting domain as well as intelligence, business, and enterprise information systems.”

The rollout follows a FedScoop investigation revealing that Grok is already being evaluated by coders at GSA for integration into the upcoming AI.gov and GSAi platforms.

Grok 4, the model behind the government suite, claimsstrong reasoning capabilitiesand commercial-grade performance. xAI says federal partners will gain access to exclusive tools—custom national security models, forward-deployed engineering teams with clearance, and classified-environment integrations. The company also teased bespoke applications for healthcare, science, and defense.

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Still, critics remain wary. Grok, which is native to X and embedded in premium subscription tiers, has been a lightning rod since launch, often mimicking Musk’s online persona and echoing his brash, unfiltered style. Most recently, Grok delivered responses that leaned into antisemitic tropes and conspiracy theories. xAI blamed inadequate content filters and insufficient reinforcement learning.

That hasn’t stopped Musk from pushing Grok deeper into public infrastructure.America is the world leader in AI,xAI wrote in its announcement,and this is in no small part due to a tradition of innovation and strong investments in engineering and science.”

Some in tech and government circles see this as a milestone. Others see red flags.

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