United States government signs low-cost deal with Elon Musk’s xAI to deploy Grok models across federal agencies, stirring debate over bias and security.
The United States government has signed a landmark agreement with Elon Musk’s artificial intelligence firm xAI, granting federal agencies access to its Grok AI models for what officials describe as an unprecedentedly low price — $0.42 per agency.
The contract, struck under the General Services Administration’s (GSA) “OneGov” initiative, aims to modernize how the government integrates digital technologies. Under the deal, Grok 4 and Grok 4 Fast will be deployed across federal departments for 18 months, with the contract expiring in March 2027.
The partnership includes dedicated engineers from xAI to assist agencies with integration and maintenance. Officials say the arrangement offers significant cost savings compared to rival contracts — OpenAI and Anthropic reportedly charge around $1 per agency, while Meta has offered similar services at no cost.
While the White House describes the agreement as a step toward greater efficiency and fiscal prudence, the rollout has already drawn scrutiny from lawmakers and civil rights groups. Critics point to Grok’s past controversies, including instances where the chatbot produced antisemitic or politically charged responses. Such behavior, observers note, would breach President Donald Trump’s AI Action Plan, which mandates neutrality and accountability in government-used artificial intelligence systems.
Read Also: Elon Musk Unveils His Superior Grokipedia To Rival Wikipedia
Security experts have also raised concerns about data privacy and oversight. The contract includes upgrade paths to higher-security subscriptions aligned with FedRAMP and Department of Defense standards, but it remains unclear how quickly agencies will adopt those safeguards.
Adding to the controversy are questions surrounding Musk’s relationship with President Trump. There are speculations that GSA was urged to approve Grok “as soon as possible” in August, reigniting speculation about political influence.
Musk previously headed the Department of Government Efficiency (DOGE) early in Trump’s presidency before resigning following policy disagreements. However, recent public appearances alongside the president — and now the Grok contract — have led some analysts to believe the two may be rebuilding their alliance.
A GSA spokesperson told TechCrunch that Musk “had no direct involvement” in negotiating the agreement. The administration, meanwhile, insists the deal is driven by economic pragmatism. “This is about securing cost-effective, secure AI solutions for the American people,” the spokesperson said.
With multiple contracts already signed with Meta, Google, Anthropic, and OpenAI, Grok’s inclusion signals Washington’s deepening commitment to a multi-vendor AI ecosystem — and its willingness to experiment, even amid controversy.
