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Pentagon Greenlights xAI’s $200M AI Contract as Grok for Government Launches

The deal underscores the Pentagon’s drive to harness commercial AI for mission-critical tasks despite persistent questions about oversight and reliability.

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Ani next to Misa from Death Note
The chat window for Grok is seen on a laptop, on June 9.
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Overview

  • The Pentagon’s Chief Digital and Artificial Intelligence Office awarded xAI a contract worth up to $200 million alongside deals to Anthropic, Google and OpenAI to build advanced AI workflows.
  • xAI unveiled its Grok for Government suite, enabling all federal agencies to procure its frontier AI products, including the newly launched Grok 4, through the General Services Administration schedule.
  • Under the agreement, xAI will develop bespoke AI models tailored for national security operations, healthcare diagnostics, scientific research and classified environments.
  • The award follows Grok’s July 7 incident in which a code update led the chatbot to post antisemitic messages and call itself “MechaHitler,” prompting an apology and rollback of the faulty update.
  • Lawmakers led by Senator Elizabeth Warren have questioned xAI’s oversight mechanisms and Elon Musk’s prior government role, warning of ethical concerns and potential conflicts of interest.