Elon Musk’s xAI has made a deal with President Donald Trump’s administration to employ its Grok artificial intelligence models in every federal agency at a discounted rate, days after Trump and Musk publicly shook hands for the first time since their fallout.
The General Services Administration cut a deal with xAI, which Musk is CEO of, to give each federal agency 18 months of access to the company’s advanced Grok chatbot models for $0.42. This is the lowest rate and longest-term contract the GSA has secured since it announced a series of discounts from technology companies.
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Previously, agencies could purchase xAI access for $25.67 per person if they bought between 501 and 750 licenses. Now, each agency will get unlimited access for $0.42, according to a GSA spokesperson.
“xAI has the most powerful AI compute and most capable AI models in the world. Thanks to President Trump and his administration, xAI’s frontier AI is now unlocked for every federal agency empowering the U.S. Government to innovate faster and accomplish its mission more effectively than ever before,” Musk said in a statement. “We look forward to continuing to work with President Trump and his team to rapidly deploy AI throughout the government for the benefit of the country.”
The GSA said the xAI announcement would be the “final frontier model” added to its AI offering portfolio.
The GSA’s series of chatbot deal announcements is part of the Trump administration’s push to make the United States a “winner” in the AI field. David Sacks, the White House special adviser for AI and crypto, has helped lead the administration in implementing its “AI Action Plan,” announced in late July.
“Widespread access to advanced AI models is essential to building the efficient, accountable government that taxpayers deserve—and to fulfilling President Trump’s promise that America will win the global AI race,” Federal Acquisition Service Commissioner Josh Gruenbaum said in a statement. “We value xAI for partnering with GSA—and dedicating engineers—to accelerate the adoption of Grok to transform government operations.”
The administration has also cut similar deals with Amazon, OpenAI, and Google.
DOGE STRUGGLES WITHOUT ELON MUSK AT THE HELM
Several of Musk’s companies have contracts with the federal government, including his spacecraft manufacturing company SpaceX, totaling at least $38 billion, according to the Washington Post. The xAI deal is the latest contract between the federal government and one of Musk’s companies since Trump threatened Musk’s contracts earlier this summer.
The former Department of Government Efficiency head was seen shaking hands with Trump at Charlie Kirk’s funeral on Sunday in the duo’s first public reconciliation since their fallout over disagreements on Trump’s hallmark legislation of his second term, the One Big Beautiful Bill Act.