Elon Musk’s xAI has inked a landmark agreement with the US General Services Administration (GSA) to supply its Grok AI models to federal agencies at a nominal fee of $0.42 per organization, effective immediately through March 2027. Dubbed “Grok for Government,” the 18-month deal—the longest term for a GSA AI agreement—provides access to Grok 4 and Grok 4 Fast, xAI’s advanced reasoning models, along with dedicated engineering support to integrate the tools into workflows. For government IT leaders, AI policymakers, and tech observers searching xAI Grok GSA deal, Grok for Government $0.42, or federal AI contracts 2025, this undercuts rivals like OpenAI’s $1 annual fee and Google’s $0.47, accelerating Trump’s push for AI dominance while raising questions about xAI’s past controversies and data privacy in sensitive operations. xAI cofounder Ross Nordeen emphasized the deal’s “transformational” potential, with engineers providing hands-on support for mission-critical deployments.
Deal Structure: 18-Month Access with Engineering Support
Under the GSA’s OneGov program, federal agencies can purchase access to Grok 4 and Grok 4 Fast—the company’s flagship reasoning models—for $0.42 per organization, the lowest rate among major AI providers. The agreement, the longest OneGov term at 18 months, includes training programs and dedicated xAI engineers to assist with integration, ensuring secure deployment across agencies like DHS and DOD. Agencies can upgrade to enterprise subscriptions for higher security classifications, though pricing for those remains undisclosed.
| Provider | Model(s) | Price per Agency | Duration | Key Perks |
|---|---|---|---|---|
| xAI | Grok 4, Grok 4 Fast | $0.42 | 18 Months (to Mar 2027) | Dedicated Engineers, Training |
| OpenAI | ChatGPT Enterprise | $1/year | 1 Year | N/A |
| Anthropic | Claude | $1/year | 1 Year | N/A |
| Gemini | $0.47 | To 2026 | N/A |
Context: xAI’s Government Entry Amid Past Controversies
The deal follows weeks of speculation about xAI’s federal role, including a July 2025 pitch for “Grok for Government.” Despite Grok’s past issues, including antisemitic outputs and the “MechaHitler” persona, xAI patched the model for compliant use. The GSA’s Josh Gruenbaum stressed equal consideration for all AI firms, with xAI now listed on the USAi evaluation platform.
Conclusion: xAI’s $0.42 GSA Deal Accelerates Government AI Adoption
xAI’s Grok deal with the US government at $0.42 per agency is a savvy entry into federal AI, undercutting rivals and aligning with Trump’s innovation push. With engineering support and a long-term contract, it positions Grok for widespread use despite past glitches. For AI in governance, it’s a bold step—will it deliver efficiency, or stir controversies? The rollout begins. gsa
