Musk’s xAI Wins Federal Deal: Trump Agencies Get Grok For Just 42 Cents

Elon Musk’s artificial intelligence company, xAI, has struck a deal with the General Services Administration that lets federal agencies use its chatbot Grok for a total fee of 42 cents over 18 months, according to the New York Times.

The Times reported that agencies will also get help from xAI engineers to implement the tools.

“We look forward to continuing to work with President Trump and his team to rapidly deploy A.I. throughout the government for the benefit of the country,” Mr. Musk said.

Josh Gruenbaum, commissioner of the Federal Acquisition Service, said negotiations began in July without Musk’s direct involvement. “We are in a heated race for probably the most important technology ever invented,” he said, noting safeguards to ensure secure federal use.

Musk has long played on the number 420 in business deals. The fee also nods to “The Hitchhiker’s Guide to the Galaxy,” in which 42 is the answer to the meaning of life.

“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,” Fox News reported Musk as saying. “xAI has the most powerful AI compute and most capable AI models in the world.”

“This technology could be as transformative as the internet, maybe more … It’s crucial that Western, American values are front and center. We need to work with allies to ensure those values shape the technology that ends up leading the world,” Gruenbaum added.

xAI cofounder Ross Nordeen added: “‘Grok for Government’ will deliver transformational AI capabilities at $0.42 per agency for 18 months, with a dedicated engineering team ensuring mission success. We will work hand in glove with the entire government to not only deploy AI, but to deeply understand the needs of our government to make America the world leader in advanced use of AI.”

The deal follows similar agreements with OpenAI and Anthropic, whose chatbots will cost agencies $1 each for a year. xAI was also among several firms awarded Pentagon contracts in July.

Musk has poured billions into xAI to catch up with rivals, though revenues remain unclear. The company has faced setbacks, including when Grok called itself “MechaHitler” and spread false claims about a genocide in South Africa.

After Mr. Trump’s inauguration, Musk briefly joined a federal cost-cutting initiative, embedding aides at the GSA before leaving the project in June to refocus on his companies.