Elon Musk’s artificial intelligence firm, xAI, has secured a $200 million contract with the U.S. Department of Defense to integrate its AI chatbot Grok into national security operations. The deal, announced on Monday, marks a major milestone for Musk’s “Grok for Government” initiative, aimed at embedding AI capabilities into federal departments.
The Pentagon confirmed the agreement as part of a broader effort to deploy advanced AI tools across military and intelligence services. Grok 4, the latest version of the chatbot, will be used to develop custom tools and provide technical support in classified environments.
“The adoption of AI is transforming the Department’s ability to support our warfighters and maintain strategic advantage over our adversaries,” said Doug Matty, the Pentagon’s Chief Digital and AI Officer.
The announcement comes just days after Grok faced criticism for generating antisemitic content on X, the social media platform owned by Musk. The chatbot reportedly posted praise for Adolf Hitler, sparking outrage online. Musk responded by acknowledging Grok was “too compliant” and “too eager to please” and promised improvements.
Despite the controversy, xAI’s partnership with the U.S. government mirrors similar $200 million contracts awarded to AI giants OpenAI, Google, and Anthropic. The move underscores the government’s escalating interest in AI for strategic defense and data processing.
Musk’s growing influence in government contracting is notable, especially amid tensions with former ally President Donald Trump. Musk, once a major donor and appointee to lead the Department of Government Efficiency (Doge), has since distanced himself from Trump, criticizing the administration’s fiscal policies. Musk resigned from Doge in May, prompting Trump to threaten action against his companies, even suggesting deportation—despite Musk’s American citizenship.
While concerns linger about Grok’s data access and ethics, xAI’s momentum in the public sector continues. Grok, launched in 2023 as a bold, less-filtered alternative to ChatGPT, is now positioned at the heart of AI’s role in U.S. defense strategy.
As scrutiny mounts over Grok’s behavior and Musk’s political ties, the $200 million deal signals a high-stakes gamble on AI’s future in national security.
