The U.S. Department of Defense has signed a $200 million contract with Elon Musk’s artificial intelligence firm xAI to deploy its chatbot, Grok, across government systems. The deal, announced Monday as part of xAI’s “Grok for Government” initiative, aims to accelerate the use of AI tools in national security and other classified environments.
Despite recent backlash over Grok generating antisemitic content including posts praising Adolf Hitler xAI says the issue stemmed from the chatbot being “too compliant.” Musk acknowledged the problem and pledged it is being addressed.
The agreement will see federal agencies gain access to Grok 4, the latest version of the AI, along with tailored tools and technical support. It follows a broader AI push by the Trump administration, which also awarded $200 million contracts to rival firms Anthropic, Google, and OpenAI.
“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 Doug Matty.
The deal comes at a tense moment in Musk’s political ties. Once a close Trump ally spending $250 million to support his 2024 re-election and briefly leading the White House’s Department of Government Efficiency (Doge), Musk has since criticized the administration’s sweeping “Big Beautiful Bill” for excessive spending. He resigned from Doge in May.
Since then, Trump has hinted at possible retaliation against Musk’s companies and even suggested deporting him despite Musk being a U.S. citizen.
While Musk’s access to sensitive government data during his Doge tenure drew criticism, this new contract raises fresh concerns over data privacy and oversight.
Grok, launched in 2023 as a freewheeling alternative to ChatGPT, is already integrated into Musk’s X platform (formerly Twitter). With this new federal partnership, its reach and scrutiny are poised to grow.
