Elon Musk’s xAI Lands Multibillion-Dollar Pentagon Deal

Despite his frequent criticism of government spending, Elon Musk’s artificial intelligence startup xAI has secured a major deal with the U.S. Department of Defense (DoD), Forbes Daily reported.

xAI announced the creation of “Grok for Government,” a version of its chatbot tailored for federal use.

The Pentagon awarded contracts worth up to $200 million to xAI, Google, Anthropic, and OpenAI to help accelerate AI integration across the U.S. military. xAI announced the creation of “Grok for Government,” a version of its chatbot tailored for federal use.

The agreement comes less than a week after xAI’s Grok system posted antisemitic content, prompting public backlash and an apology from the company. Critics have accused Grok of unstable behavior and algorithmic bias, alleging that it sometimes tailors its output based on Elon Musk’s direct approval or user ideology.