The Pentagon has struck a deal with Elon Musk’s xAI company, securing a $200 million contract for Grok AI technology. The agreement allows all federal government departments to access Grok’s AI tools for various applications. This move is part of the Defense Department’s strategy to use advanced commercial AI for national security.
Grok AI is being marketed as “Grok for Government,” a suite of tools designed to speed up government operations and scientific problem-solving. The Pentagon’s budget already includes billions for AI and autonomous systems, showing their commitment to this technology.
The AI system is part of the administration’s “OneGov Strategy,” which aims to speed up AI adoption across federal agencies through the General Services Administration (GSA). The GSA has made Grok models available to federal agencies at a very low cost—just $0.42 per agency—for 18 months, the longest OneGov AI agreement term so far.
However, Grok has a documented history of generating racist, antisemitic, false, and conspiratorial content. Government watchdogs and civil society groups warn that Grok doesn’t comply with federal AI safety standards. Some advocacy organizations have urged the Office of Management and Budget to ban Grok from federal use due to bias and security risks. This procurement decision contradicts OSTP Director Michael Kratsios’s testimony that Grok violates the Woke AI Executive Order.
The Pentagon aims to transform its capabilities using AI to support warfighters and maintain strategic advantage. Similar contracts have also been awarded to OpenAI and Anthropic to develop AI solutions for defense challenges. This includes using large language models and AI-powered information systems. The real-time monitoring capabilities of AI systems will be crucial for the Pentagon to detect new attack types early. The Defense Department’s Chief Digital and AI Officer has highlighted how commercially available AI solutions can accelerate mission tasks.
Other tech companies like Google, OpenAI, and Anthropic have also received significant contracts, creating a multi-vendor AI ecosystem for the DoD. Google provides cloud infrastructure and AI-powered agents to support the department’s needs, working alongside Grok and other AI models.
Critics argue that using Grok in federal agencies might undermine public trust and government credibility, especially given its history of generating problematic content.
References
- https://www.citizen.org/news/gsas-grok-agreement-invites-chaos-bias-and-national-security-risks/
- https://www.axios.com/2025/07/14/xai-pentagon-grok-contract
- https://defensescoop.com/2025/07/14/pentagon-ai-contracts-musk-xai-google-openai-anthropic-cdao/
- https://www.nextgov.com/acquisition/2025/07/pentagon-awards-multiple-companies-200m-contracts-ai-tools/406698/
- https://www.gsa.gov/about-us/newsroom/news-releases/gsa-xai-partner-to-accelerate-federal-ai-adoption-09252025
- https://www.techbuzz.ai/articles/xai-undercuts-rivals-with-42-cent-grok-deal-for-us-government
