Elon Musk's Grok inks deal worth $200 million with Pentagon amid fallout with Donald Trump

Elon Musk’s xAI deployed its AI chatbot to the US Department of Defense, signing a $200 million deal for its services under the name "Grok for Government.” The deals come shortly after Grok faced controversy over its past antisemitic posts, including praising Adolf Hitler on X. However, Musk has assured improvements are underway while citing that the bot is ‘too compliant’ and ‘too eager to please’.

Elon Musk’s xAI deal with the Pentagon

With the Pentagon contract, Musk’s xAI aims to develop agentic AI workflows across mission areas. In addition, all federal government departments, agencies, and offices can buy xAI products with their inclusion on an official supplier list. Also, the US government departments will have access to Grok 4, the latest version of the chatbot. It will also have custom tools designed for government use. To ensure seamless integration, the xAI will provide technical support for a classified environment. 

The Pentagon is set to adopt AI technology by awarding similar contracts to Google, OpenAI and Anthropic, each with a $200 million slab. According to Doug Matty, the administration's Chief Digital and AI Officer, the adoption of AI will transform the Department's ability to support warfighters and maintain strategic advantage over adversaries, as reported by the BBC. Meanwhile, the xAI team is customising Grok for classified use, integrating their advanced research models into defense data platforms, under its ‘Grok for government’ program.

Elon Musk’s partnership with the Pentagon amid tension with US President Donald Trump

Despite Elon Musk and Donald Trump locked in a bitter feud, the Tesla boss has been expanding his partnership with the government. He landed a multi-million-dollar deal with the Pentagon despite his reportedly strained relationship with Trump. The two showcased their friendship when Musk actively campaigned for Trump, spending a billion dollars on his re-election effort in 2024. He even led the Department of Government Efficiency (Doge), a cost-cutting initiative; however, he resigned after disagreement over Trump's ‘Big Beautiful Bill’. Following his resignation, Trump warned to use Doge against Musk's companies and even suggested deporting Musk. Meanwhile, tension with Trump hasn’t stopped Musk’s xAI from continuing to expand its government work.