Hassan Khan
Elon Musk’s Artificial Intelligence startup xAI will provide its “Grok for Government” AI tools to federal agencies for just $0.42 per agency over 18 months, Under a new agreement with the General Services Administration (GSA). The move mirrors similar ultra low cost offers from OpenAI, Anthropic, Google, and Meta as AI firms compete for government contracts. The agreement comes days after Musk’s brief meeting with Trump, highlighting his ongoing but complex political ties.
Musk’s Pitch: Innovation at Minimal Cost
In a statement, Musk said the deal will help government offices “Innovate faster and accomplish their mission more effectively than ever before.” Alongside access to Grok, xAI is also promising training programs and support to ensure agencies can securely integrate the system into daily operations.
Part of a Larger AI Bidding War
The bargain price may sound unusual, but xAI isn’t alone in offering near free deals. OpenAI struck an agreement in August to supply ChatGPT Enterprise to federal agencies for $1 per agency. Anthropic followed with a similar arrangement for its Claude chatbot. Google entered the race with its “Gemini for Government” offer at $0.47 per agency through 2026, and earlier this week, Meta’s Llama model was also cleared for federal use.
Read More: Trump Administration Agrees to Use AI Models From Musk’s xAI
These almost symbolic deals suggest that tech giants see federal partnerships not just as immediate revenue, but as a path to long term influence and lucrative future contracts.
Political Undercurrents
The announcement also comes against a political backdrop. Just days ago, Musk was spotted speaking with Donald Trump at a memorial service, their first interaction in months. Musk had previously led Trump’s short lived “Department of Government Efficiency,” aimed at slashing federal spending. Though the two later clashed, Musk remains a notable figure in Trump’s orbit.
Overview
For the GSA, the agreement signals its push to modernize, even as it rebuilds after significant staffing cuts earlier this year. With AI adoption accelerating across government, xAI’s ultra low pricing makes clear that the real prize is long term integration not the pennies collected upfront.
In-Short: Elon Musk’s Artificial Intelligence startup xAI is making headlines with an almost symbolic offer to the U.S. government. The company announced it will provide its “Grok for Government” AI services to federal agencies at a token cost of $0.42 per agency for 18 months, under a new agreement with the General Services Administration (GSA).
