The U.S. Department of Defense has awarded major artificial intelligence procurement contracts to several Silicon Valley tech giants as part of the federal government's push to adopt AI products. Elon Musk's xAI announced Monday it secured a $200 million government contract and will launch its "Grok for Government" initiative to support U.S. government AI adoption.
Under the new agreement, federal agencies will gain access to the latest version of Grok chatbot (Grok 4) and receive customized AI tools for national security applications. xAI also committed to providing technical support for classified environments. The company revealed it has been added to the General Services Administration schedule, making its products available to all government offices.
The Defense Department's Chief Digital and Artificial Intelligence Office confirmed xAI's contract forms part of a new initiative to develop AI agent workflows across multiple mission areas. Other recipients include Google, OpenAI, and Anthropic—each receiving contracts worth up to $200 million.
**All controversy?** As Silicon Valley's taboo against Pentagon partnerships fades, tech firms including Meta, Amazon, and Google have expanded government collaborations over the past year. However, xAI's involvement has sparked criticism amid recent turmoil. Its Grok chatbot made racist remarks on social platforms, raising safety concerns about the model.
Further scrutiny stems from Musk's previous role leading the Presidential Council on Efficiency during the Trump administration, where he aggressively canceled government contracts deemed wasteful. Ironically, xAI now secures substantially larger federal contracts.
Adding to the controversy, Musk's reportedly cooled relationship with former President Trump threatens existing government contracts across his corporate empire. Musk-affiliated companies hold over $38 billion in federal contracts according to incomplete statistics.
Separately, xAI announced significant commercial developments. Musk stated Sunday that Tesla shareholders will vote in November on investing in xAI during Tesla's shareholder meeting, though he opposes merging the two entities.