The week after its Grok chatbot identified itself as “MechaHitler” and generated antisemitic posts, Elon Musk’s xAI firm announced a contract with the US Department of Defense worth nearly $200m. The deal is for developing and implementing artificial intelligence tools for the agency.
The DoD on Monday also announced similar contracts with $200m ceilings with several other major US-based artificial intelligence developers, including Google, Anthropic and OpenAI. The agency is partnering with the General Services Administration to make these companies’ AI tools available for use throughout the federal government.
“Leveraging commercially available solutions into an integrated capabilities approach will accelerate the use of advanced AI as part of our joint mission-essential tasks in our warfighting domain as well as intelligence, business, and enterprise information systems,” the US chief digital and AI officer Dr Doug Matty said in a statement.
The contracts deepen the US military’s ties with AI developers and are poised to expand the use of artificial intelligence within the US government after Musk’s so-called ‘department of government efficiency’ (Doge) oversaw mass firings of workers throughout federal agencies. Until Musk’s recent falling out with Donald Trump, the xAI founder was de facto leader of Doge as it gutted government agencies and in some cases pushed for departments to use the Grok chatbot.
xAI’s contract announcement comes after the company was forced to issue a public apology after Grok posted a string of responses on X last week that included promoting Nazi ideology and rape fantasies. The company claimed that it fixed the issue and subsequently unveiled its latest AI model with a $300 a month subscription for an advanced version of the tool.
The DoD’s contract will give xAI a boost of revenue as it seeks to compete with more established AI developers like OpenAI, which is led by Musk’s former associate turned rival, Sam Altman. Musk has been heavily promoting xAI and attempting to use other parts of his tech empire to support its future, including having SpaceX invest $2bn into the startup, allowing it to acquire X, formerly, Twitter, and announcing on Sunday that Tesla shareholders will vote on their own investment in xAI.
xAI announced the deal and the creation of what it calls “Grok For Government” in a post on its website on Monday, detailing that in addition to its publicly available products it would create custom AI-powered applications for potential use in healthcare, national security and other public services.
“Under the umbrella of Grok For Government, we will be bringing all of our world-class AI tools to federal, local, state, and national security customers,” xAI said in a statement on its website. “These customers will be able to use the Grok family of products to accelerate America – from making everyday government services faster and more efficient to using AI to address unsolved problems in fundamental science and technology.”
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Musk has long complained that AI chatbots are designed to promote “woke” ideology and vowed his Grok product would be “maximally truth seeking”. It has repeatedly run into controversy over promoting conspiracies and falsehoods, including earlier this year giving unprompted responses that made false claims of “white genocide” taking place in South Africa – echoing claims that Musk has made himself.
Ethics watchdogs, Democratic lawmakers and privacy advocates have expressed concerns about how Musk and Doge have implemented AI in government and gained access to sensitive data while embedded at government agencies. Doge staffers previously fed government data into a custom version of Grok’s chatbot in a potential violation of privacy and security laws, Reuters reported in May.
