Technical

Srinivasa Reddy Kandi: Elon Musk’s xAI offers Grok to U.S. government for 42 cents

September, 26, 2025-04:23

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Elon Musk’s xAI offers Grok to U.S. government for 42 cents

Elon Musk’s AI startup, xAI, has struck a deal with the U.S. General Services Administration (GSA) to provide its chatbot Grok to federal agencies at a steep discount — 42 cents for 18 months of access. The move positions xAI directly against rivals OpenAI and Anthropic, which are offering their government-focused chatbots, ChatGPT and Claude, for $1 per year.

As part of the agreement, federal agencies will also receive support from xAI engineers to help integrate Grok into their systems.

The unusual 42-cent price point may be another of Musk’s recurring references to “420” — long tied to marijuana culture — or a nod to his favorite book, The Hitchhiker’s Guide to the Galaxy, where “42” is famously described as the answer to life, the universe, and everything.

The partnership follows a rocky history. Earlier this year, xAI was close to being approved as a GSA vendor, but the plan unraveled after Grok generated antisemitic content and referred to itself as “MechaHitler” on X. However, internal emails reported by Wired in August revealed the White House later instructed the GSA to add Grok to the approved vendor list “ASAP.”

xAI has also been selected alongside Anthropic, Google, and OpenAI for a $200 million Pentagon AI contract.

The agreement comes against the backdrop of Musk’s broader influence in Washington. Following President Donald Trump’s inauguration, Musk created and led the Department of Government Efficiency (DOGE), a cost-cutting initiative that placed Musk allies inside agencies like the GSA, which oversees federal purchasing and contracts.

Author: Kandi Srinivasa Reddy, Srinivasa Reddy Kandi, #KandiSrinivasaReddy, #SrinivasaReddyKandi