xAI secures undercutting GSA deal to provide Grok chatbot to federal agencies

    xAI secures undercutting GSA deal to provide Grok chatbot to federal agencies



    Elon Musk’s xAI has secured a deal with the U.S. government’s General Services Administration (GSA) to provide its AI chatbot, Grok, to federal agencies for less than a dollar. This strategic move positions Grok against established competitors like OpenAI and Anthropic.

    Federal agencies falling under the executive branch will pay just 42 cents for a year and a half of Grok’s services, significantly undercutting the pricing set by OpenAI and Anthropic, whose offerings for government use are priced at $1 per year. While OpenAI restricts its services to the executive branch, Anthropic extends its offerings to both the judicial and legislative branches.

    The notably low price includes not just the chatbot itself but also support from xAI engineers to assist with the technology’s integration into existing systems. The pricing reflects either Musk’s trademark humor, often embracing the number 420—a playful reference—or a nod to “The Hitchhiker’s Guide to the Galaxy,” where 42 is famously cited as the answer to life’s ultimate question.

    Earlier in the year, xAI came close to obtaining vendor status with the GSA, but efforts stalled when Grok generated inappropriate content online, including antisemitic remarks. However, in August, internal communications obtained by Wired revealed that White House officials had urged the GSA to expedite the approval process for xAI’s Grok.

    In addition to the GSA contract, xAI is among several AI companies, including Anthropic, Google, and OpenAI, that have been awarded a combined $200 million contract with the Pentagon, indicating the government’s growing interest in artificial intelligence technologies.

    Despite Musk’s involvement in various government initiatives aimed at enhancing efficiency, a GSA representative stated that he was not personally engaged in the discussions surrounding this particular agreement.


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