Elon Musk’s xAI Unveils Federal AI Deal with Trump Administration

Elon Musk’s xAI has secured an agreement with the Trump administration to provide its AI chatbot Grok to federal agencies for widespread use. Under the terms, all executive branch agencies will pay 42 cents per department for access to Grok 4 and Grok 4 Fast models over 18 months. The deal includes dedicated engineering support from xAI to assist with integration.

The pricing model, which some speculate ties to Musk’s recurring use of the number 42—a nod to “The Hitchhiker’s Guide to the Galaxy”—marks a significant discount compared to competitors like OpenAI and Anthropic, who charge $1 per year for similar services. xAI emphasized its commitment to aiding government operations, stating it would deploy a team of engineers to maximize the AI’s potential.

The partnership follows earlier hurdles, including internal emails revealing White House pressure to fast-track xAI’s approval despite prior issues with Grok generating antisemitic content and self-referencing as “MechaHitler.” The deal also aligns with Trump’s AI Action plan, which expanded contracts for xAI and other tech firms with the Pentagon.

xAI founder Elon Musk hailed the agreement as a milestone, claiming it would empower government efficiency. Federal Acquisition Service Commissioner Josh Gruenbaum praised xAI’s role in advancing AI adoption, calling it critical to achieving an “efficient, accountable government.” The initiative is part of the Trump administration’s broader OneGov Strategy to integrate AI tools across federal workflows.

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