The Pentagon has awarded up to $200 million in government contracts to Elon Musk’s AI firm xAI.
Mr Musk’s company is one of multiple leading US artificial intelligence firms to be awarded the contracts, including Anthropic, Google and OpenAI.
Each individual contract will have a ceiling of $200 million and will be aimed at scaling up adoption of advanced AI capabilities within the department of defence (DoD).
The contracts will allow the agency “to leverage the technology and talent of US frontier AI companies to develop agentic AI workflows across a variety of mission areas,” it said.
It comes as the Tesla billionaire’s AI company faces intense scrutiny over anti-Semitic posts made by its “Grok” chatbot on X.
The chatbot praised Adolf Hitler in some responses on the platform, denounced “anti-white hate,” and described Jewish representation in Hollywood as “disproportionate”.
xAI apologised for the extremist and offensive messages, and said it had corrected the instructions that led to the incidents.
Days later Grok 4, the latest chatbot version, was met with further scrutiny after it appeared to consult Mr Musk’s positions on some questions it was asked before responding.
AI to address national security challenges
The new government contracts will help the DoD use AI to address critical national security challenges, the department’s chief digital and artificial intelligence office said.
“The adoption of AI is transforming the (DoD’s) ability to support our war fighters and maintain strategic advantage over our adversaries,” Doug Matty, chief digital and AI officer, said.
The award to xAI comes despite an ongoing public feud between Mr Musk and Donald Trump following the billionaire’s departure from the White House.
The former Doge head and the president turned on each other after Mr Musk came out against the administration’s sweeping tax bill, dubbed the “big, beautiful bill”.
Mr Trump then threatened to take away Mr Musk’s government contracts and even said he would “take a look” at deporting the billionaire.