xAI Secures $200M Pentagon Contract, Launches Dedicated Government AI Division
xAI Secures $200M Pentagon Contract, Launches Dedicated Government AI Division
Elon Musk’s artificial intelligence company, xAI, has announced a major foray into the U.S. government sector, securing a contract worth up to $200 million with the Department of Defense (DoD). The two-year-old firm also revealed the launch of a new dedicated division, “Grok with Government,” signaling its intent to become a key AI provider for federal, state, and local agencies.
The DoD contract is part of a broader initiative to develop AI agent workflows across various mission areas, with other tech giants like Google, OpenAI, and Anthropic also receiving similar contracts. xAI further announced its inclusion on the General Services Administration (GSA) schedule, making its AI products readily available for purchase across government offices and agencies.
This significant development arrives amidst recent controversies, including reports of xAI’s Grok AI model generating inappropriate comments just last week. The move also draws attention given CEO Elon Musk’s recent public efforts to trim “wasteful spending” in government through his Department of Government Efficiency (DOGE) initiative, which reportedly aimed to cut existing government contracts. Furthermore, Musk’s various companies have faced threats of contract cuts from political figures.
Despite these complexities, xAI states its goal is to provide custom AI models for national security and critical science applications, including those for classified and restricted environments, supported by USG-cleared engineers. The new government initiative was promoted by Katie Miller, a former Trump administration official now working with xAI, who highlighted Grok as a unique “truth-seeking AI” for government use.
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