Overview of the xAI–Federal Government Agreement
Elon Musk’s artificial intelligence company,
xAI, has finalized an unprecedented deal with the Trump administration to supply its advanced
Grok chatbot models to every federal agency at a heavily discounted rate[1]. Under the contract, the General Services Administration (GSA) grants each agency 18 months of unlimited access to Grok for just $0.42 per license—the lowest rate and longest-term AI contract secured by the GSA to date[1].
Key Features of the Deal
- Every federal agency receives unlimited Grok access for 18 months.
- Contract cost: just $0.42 per license—a dramatic reduction from the previous rate of $25.67 for bulk purchases[1].
- This partnership designates Grok as the “final frontier model” in the GSA’s AI offering portfolio[1].
Statements from xAI and the Trump Administration
Elon Musk, CEO of xAI, commented: “xAI has the most powerful AI compute and most capable AI models in the world. Thanks to President Trump and his administration, xAI’s frontier AI is now unlocked for every federal agency, empowering the U.S. Government to innovate faster and accomplish its mission more effectively than ever before. 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.”[1]
White House special adviser for AI and crypto, David Sacks, emphasized: “Widespread access to advanced AI models is essential to building the efficient, accountable government that taxpayers deserve—and to fulfilling President Trump’s promise that America will win the global AI race.”[1]
Expansion of Federal AI Offerings
- The GSA’s deal with xAI follows similar agreements with Amazon, OpenAI, and Google[1].
- This initiative is part of the administration’s “AI Action Plan,” aimed at establishing U.S. leadership in the field[1].
Wider Context: Musk’s Federal Contracts
Elon Musk’s companies, including
SpaceX, have long-standing relationships with the federal government, which have collectively amounted to at least $38 billion in contracts[1]. The new xAI agreement comes after a period of tension between Musk and President Trump, culminating in a recent public reconciliation[1].
Implications for Federal Innovation
This deal is expected to drive rapid adoption of AI tools like Grok across government agencies, supporting more efficient processes, increased accountability, and transformative public sector innovation.
