Elon Musk Company Announces $200 Million Deal with Trump Administration
Elon Musk’s AI company,xAI,announced a $200 million partnership with the U.S. government, including a new contract with the Department of Defense. xAI introduced “Grok for Government,” offering its AI models to federal agencies through the General Services Management schedule, enabling all government departments to purchase their products. This move aligns xAI with other AI firms like Anthropic,Google,and OpenAI,which have also secured Pentagon contracts aimed at enhancing defense capabilities.
The proclamation comes amid recent public tensions between musk and former President Donald Trump,although the Trump administration proceeded with the federal contract despite their disagreements. Additionally, xAI faced controversy after its Grok chatbot generated anti-Semitic remarks, prompting the company to apologize and overhaul the chatbot’s system to prevent further misuse.
Shortly afterward, Linda Yaccarino resigned as CEO of X (formerly Twitter), expressing optimism about the platform’s future under xAI’s involvement.
Elon Musk’s artificial intelligence company, xAI, announced a $200 million partnership with the Trump administration on Monday.
In a post to its official X account, the company wrote, “Announcing Grok for Government — a suite of products that make our frontier models available to United States Government customers.”
The post further announced “a new contract from the US Department of Defense,” as well as the availability of xAI products “via the General Services Administration (GSA) schedule.”
“This allows every federal government department, agency, or office, to purchase xAI products,” the company stated.
Announcing Grok for Government – a suite of products that make our frontier models available to United States Government customers
We are especially excited about two new partnerships for our US Government partners
1) a new contract from the US Department of Defense
2) our…— xAI (@xai) July 14, 2025
“We’re hiring mission driven engineers who want to join the cause,” the company added.
According to The Hill, xAI, Anthropic, Google and OpenAI “all received contracts with the same ceiling” from the Pentagon’s Chief Digital and Artificial Intelligence Office.
Doug Matty, the Defense Department’s chief digital and AI officer, said in a statement, “The adoption of AI is transforming the Department’s ability to support our warfighters and maintain strategic advantage over our adversaries.”
The announcement comes after weeks of public tensions between Musk and President Donald Trump.
Early last month, the two traded barbs on their respective social media platforms after Musk blasted Trump’s Big Beautiful Bill.
Musk took issue with the legislation, citing concerns about the national debt. Still, Congress passed the bill, and Trump signed it on July 4.
Trump defended himself and the legislation as the attacks became more personal in nature, and Musk has been quiet for several weeks.
Despite the friction, the Trump administration moved forward with the xAI federal contract.
The deal also comes just one week after Musk’s Grok chatbot appeared to promote anti-Semitic content, including praising Adolf Hitler and blaming Jews for anti-white sentiment.
X engineers have seemingly altered Grok’s code after the chatbot briefly lauded Hitler, identified the Jews as the cause of anti-White hate, and referred to itself as “MechaHitler.”
The AI chatbot now claims the whole thing was a sarcastic display.
Follow: @AFpost pic.twitter.com/WKhawJGolf
— AF Post (@AFpost) July 8, 2025
xAI addressed the bot’s “behavior” in a statement posted to its Grok account on X.
“First off, we deeply apologize for the horrific behavior that many experienced,” the company wrote.
It attributed the issue to “deprecated code” that allowed Grok to amplify extremist X posts. The company said it had “refactored the entire system to prevent further abuse.”
Shortly after the controversy, X CEO Linda Yaccarino, abruptly resigned.
In a farewell post, she said, “After two incredible years, I’ve decided to step down as CEO of X.”
After two incredible years, I’ve decided to step down as CEO of 𝕏.
When @elonmusk and I first spoke of his vision for X, I knew it would be the opportunity of a lifetime to carry out the extraordinary mission of this company. I’m immensely grateful to him for entrusting me…
— Linda Yaccarino (@lindayaX) July 9, 2025
She added, “Now, the best is yet to come as X enters a new chapter with @xAI.”
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