What just happened? Despite his previous public spat with Donald Trump, Elon Musk's xAI has agreed to partner with the US General Services Administration (GSA) in a deal that allows agencies to buy Grok chatbot models at a cost of 42 cents per organization. That's less than the $1 per year OpenAI charges for access to its ChatGPT services.
The deal will give federal agencies access to Grok for Government, based on the Grok 4 and Grok 4 Fast models. It's valid for 18 months – until March 2027 – making it the longest AI contract signed by the government to date.
xAI is also assigning dedicated engineers to help participating agencies quickly and efficiently integrate these AI tools into their workflows, according to the official GSA announcement.
"xAI has the most powerful AI compute and most capable AI models in the world," Musk said in a statement.
"Thanks to President Trump and his administration, xAI's frontier AI is now unlocked for every federal agency empowering the US Government to innovate faster and accomplish its mission more effectively than ever before," Musk added. "We look forward to continuing to work with President Trump and his team to rapidly deploy AI throughout the government for the benefit of the country."
The agreement also offers agencies the option to upgrade to Grok enterprise subscriptions aligned with FedRAMP and DoD Impact Levels (IL), unlocking enhanced features and higher rate limits. To encourage adoption, xAI will provide introductory training, ongoing customized support, and collaborate with agencies to ensure secure integration.
With fewer safeguards, its ability to generate "spicy" videos, and the "MechaHitler" comments from earlier this year, Grok is no stranger to controversy. In August, more than 30 advocacy organizations called for the chatbot to be banned from any federal government use.
xAI joins several other AI firms that have recently secured contracts or partnerships with the US government as part of its push to integrate artificial intelligence across federal agencies.
OpenAI, Anthropic, and Google have been awarded Department of Defense contracts to develop and deploy advanced AI tools, while their platforms – along with Meta's Llama models – have been added to the GSA schedule, making them accessible for government use.
Companies like Scale AI and Palantir are also providing data infrastructure, analytics, and AI integration for defense and civilian applications. Meanwhile, established government contractors such as Booz Allen Hamilton, Accenture Federal Services, and SAIC continue to support AI adoption through large-scale federal projects.
However, the OpenAI partnership is still a surprise given the history between Musk and Trump. While the pair had an apparently close relationship during the Tesla CEO's time as head of Doge, they had a massive falling out after Musk left. In now-deleted X posts, Musk threatened to decommission the Dragon spacecraft and claimed the president is in the Epstein files. Trump, meanwhile, threatened to end the billions of dollars in subsidies Musk's companies receive from the government, suggested Doge should investigate the firms, and even threatened to deport the South Africa-born billionaire.
But Musk and Trump have been patching things up recently; they were sitting next to each other and chatting at Charlie Kirk's memorial.