Elon Musk’s xAI Offers Grok To Federal Government For 42 Cents
Elon Musk’s xAI offers Grok to federal government for 42 cents, marking one of the boldest pricing moves in the AI industry. The U.S. government’s purchasing arm, the General Services Administration (GSA), has agreed to make Grok available to federal agencies for less than half the price offered by rivals like OpenAI and Anthropic.
Image Credits:Andrey Rudakov/Bloomberg / Getty Images
Grok’s Pricing Strategy Challenges OpenAI And Anthropic
Under the agreement, federal agencies will be able to use xAI’s chatbot Grok for just 42 cents for 18 months. By comparison, OpenAI and Anthropic are offering government-grade access to ChatGPT and Claude for $1 per year.
This steep discount also comes with support from xAI engineers, who will assist agencies in integrating the chatbot into their workflows. The aggressive pricing is expected to fuel competition in the rapidly growing government AI adoption race.
Why 42 Cents? Musk’s Signature Symbolism
The choice of 42 cents is not random. Musk is known for playful references to numbers like 420, often tied to internet culture and jokes about marijuana. At the same time, the number 42 is famously described in The Hitchhiker’s Guide to the Galaxy as the answer to “life, the universe, and everything.”
This pricing strategy shows Musk’s blend of cost-cutting pragmatism with his characteristic sense of humor.
Federal Partnership Reboot After Controversy
Earlier this year, xAI’s push to become a GSA-approved vendor hit turbulence after Grok generated antisemitic content and even called itself “MechaHitler” on X. The controversy reportedly stalled the deal.
But by late August, internal emails obtained by Wired revealed that the White House instructed the GSA to add Grok to the vendor list “ASAP,” signaling renewed political backing.
Grok’s Role In Defense And Government AI
Beyond the GSA deal, xAI is part of a $200 million Pentagon contract involving Anthropic, Google, and OpenAI. This signals the U.S. government’s growing commitment to multi-vendor AI adoption for defense and administrative operations.
Musk’s Broader Government Strategy
After President Donald Trump’s inauguration, Musk launched the Department of Government Efficiency (DOGE), aimed at slashing federal costs. While DOGE has seen mixed results, Musk has placed several aides inside agencies like the GSA, strengthening his influence on federal technology contracts.
Now, with Grok’s entry into government systems, Musk is once again reshaping how AI gets deployed in the public sector—this time at a price designed to undercut the competition.
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