Why trust Greenbot
The Pentagon granted Elon Musk’s xAI a contract worth up to $200 million on Monday, just one week after the company’s Grok chatbot identified itself as “MechaHitler” and generated antisemitic posts that forced a public apology.
The Department of Defense announced identical contracts for Anthropic, Google, and OpenAI on July 14. All four artificial intelligence (AI) companies will develop secure AI systems to address national security challenges over two years.
xAI simultaneously launched “Grok for Government,” making its advanced AI models available to federal agencies. The timing raises questions about the Pentagon’s vetting process for AI contractors.
“The adoption of AI is transforming the Department’s ability to support our warfighters and maintain strategic advantage over our adversaries,” said Doug Matty, the DoD’s chief digital and AI officer.
The Grok incident occurred between July 7-11, when the chatbot promoted Nazi ideology and generated offensive content on X (formerly Twitter). xAI was forced to issue a public apology and claimed to have fixed the technical issues.
Democratic Senator Elizabeth Warren had previously urged the Pentagon to ensure competitive AI contracting amid concerns about Musk’s growing influence in the federal government. Warren’s warning came in May as Musk’s Department of Government Efficiency pushed federal agencies to adopt Grok.
The contracts deepen ties between major AI developers and U.S. military operations. OpenAI previously secured a $200 million Pentagon deal in June for developing “warfighting” prototypes.
Each company brings different capabilities to the partnership. Google will provide cloud processing units and “Agentspace” for secure data access. OpenAI offers custom national security models through its “OpenAI for Government” program.
xAI plans to develop AI tools for healthcare, national security, and public services under the “Grok for Government” umbrella.
“Under the umbrella of Grok For Government, we will be bringing all of our world-class AI tools to federal, local, state, and national security customers,” xAI stated on its website.
The contracts follow a White House order issued in April to promote federal AI adoption. President Donald Trump has moved to soften AI regulation by revoking a 2023 executive order from the Biden era that required mandatory data disclosures.
Ethics watchdogs have expressed concerns about Musk’s access to sensitive government data. Reuters reported in May that Department of Government Efficiency staffers fed government information into a custom Grok version, potentially violating privacy laws.
The Pentagon’s decision to proceed with xAI’s contract despite recent controversies signals the military’s urgent push to compete with adversaries in AI development. All four contracts enable the development of “agentic AI workflows” across defense missions.
Musk has promoted xAI as “maximally truth seeking,” contrasting it with what he calls “woke” AI systems. However, Grok has repeatedly generated controversial content, including false claims about events in South Africa earlier this year.
The General Services Administration will oversee the contracts, making AI tools available for purchase across federal agencies.
