Musk’s Grok lands $200 million defense contract as AI enters U.S. government operations
TOI World Desk | TIMESOFINDIA.COM | Jul 16, 2025, 00:42 IST
( Image credit : AP, TOIGLOBAL )
Elon Musk's xAI secured a $200 million deal with the U.S. Department of Defense. Grok, xAI's AI model, will be integrated into government operations. This aims to enhance services and tackle security challenges. The deal follows controversy over Grok's offensive content. xAI assures tailored safeguards for government use. Grok's adoption by federal agencies is anticipated.
In a bold new partnership between Silicon Valley and Washington, Elon Musk’s artificial intelligence startup xAI has secured a $200 million contract with the U.S. Department of Defense, launching its flagship AI model Grok into federal government operations. The deal marks a significant shift for the controversial chatbot, now entering the realm of national security and scientific research under a new initiative called “Grok for Government.”
xAI confirmed the agreement on Monday, signaling that the Defense Department will begin integrating Grok into its systems to enhance government services, streamline operations, and tackle classified scientific and security challenges. The announcement arrives just days after Grok faced public backlash for generating offensive and antisemitic content on Musk’s social media platform, X.
Despite the controversy, Grok has been cleared for government use, with xAI assuring officials that the version being deployed will feature tailored safeguards and custom models designed to operate in secure and classified environments. The deal also registers xAI as a vendor with the General Services Administration, which means that Grok could be adopted by a wide range of federal agencies in the near future.
The $200 million agreement allows for the deployment of Grok 4, the latest evolution of the chatbot, which xAI says is capable of helping the government meet national priorities through advanced reasoning and natural language capabilities. “We’ve been working closely with leaders across government to understand their mission needs,” the company said in a statement. “As a result, we’re offering specialized models for defense and scientific use cases, including deployments in restricted settings.”
However, the deal is not without controversy. Just last week, Grok generated deeply offensive content in response to user prompts, including references to Adolf Hitler and antisemitic slurs. The posts sparked outrage, leading to the resignation of X CEO Linda Yaccarino and a public relations crisis for Musk. xAI has since pledged to tighten content moderation and remove inappropriate outputs more swiftly.
Critics have raised concerns about the reliability of commercial AI models like Grok being used in sensitive defense applications. While xAI claims it is addressing these risks with custom safeguards, skeptics worry that such tools are still too unpredictable for use in high-stakes national security environments.
The timing of the contract also draws attention to Musk’s shifting political ties. Once seen as an ally of President Donald Trump, Musk has recently fallen out with the administration. Trump has reportedly considered pulling federal contracts from Musk’s other ventures, including SpaceX and Tesla, in response to various policy disagreements.
Nevertheless, the Grok deal positions Musk’s AI venture as a major player in the rapidly evolving landscape of government technology. As artificial intelligence becomes increasingly central to public sector innovation, partnerships like this could set the tone for how Silicon Valley collaborates with Washington in the AI era.
Whether Grok proves to be a breakthrough or a liability remains to be seen. But with billions in future government AI contracts on the horizon, Musk’s controversial chatbot has already secured a historic foothold inside the halls of U.S. power.
xAI confirmed the agreement on Monday, signaling that the Defense Department will begin integrating Grok into its systems to enhance government services, streamline operations, and tackle classified scientific and security challenges. The announcement arrives just days after Grok faced public backlash for generating offensive and antisemitic content on Musk’s social media platform, X.
Despite the controversy, Grok has been cleared for government use, with xAI assuring officials that the version being deployed will feature tailored safeguards and custom models designed to operate in secure and classified environments. The deal also registers xAI as a vendor with the General Services Administration, which means that Grok could be adopted by a wide range of federal agencies in the near future.
The $200 million agreement allows for the deployment of Grok 4, the latest evolution of the chatbot, which xAI says is capable of helping the government meet national priorities through advanced reasoning and natural language capabilities. “We’ve been working closely with leaders across government to understand their mission needs,” the company said in a statement. “As a result, we’re offering specialized models for defense and scientific use cases, including deployments in restricted settings.”
However, the deal is not without controversy. Just last week, Grok generated deeply offensive content in response to user prompts, including references to Adolf Hitler and antisemitic slurs. The posts sparked outrage, leading to the resignation of X CEO Linda Yaccarino and a public relations crisis for Musk. xAI has since pledged to tighten content moderation and remove inappropriate outputs more swiftly.
Critics have raised concerns about the reliability of commercial AI models like Grok being used in sensitive defense applications. While xAI claims it is addressing these risks with custom safeguards, skeptics worry that such tools are still too unpredictable for use in high-stakes national security environments.
The timing of the contract also draws attention to Musk’s shifting political ties. Once seen as an ally of President Donald Trump, Musk has recently fallen out with the administration. Trump has reportedly considered pulling federal contracts from Musk’s other ventures, including SpaceX and Tesla, in response to various policy disagreements.
Nevertheless, the Grok deal positions Musk’s AI venture as a major player in the rapidly evolving landscape of government technology. As artificial intelligence becomes increasingly central to public sector innovation, partnerships like this could set the tone for how Silicon Valley collaborates with Washington in the AI era.
Whether Grok proves to be a breakthrough or a liability remains to be seen. But with billions in future government AI contracts on the horizon, Musk’s controversial chatbot has already secured a historic foothold inside the halls of U.S. power.