Elon Musk's xAI Offers Grok to Federal Government at 42 Cents

Grok, the AI chatbot developed by Elon Musk's xAI, is now available to the U.S. federal government for less than a dollar, marking a competitive move against companies like OpenAI and Anthropic.

Under an agreement between xAI and the General Services Administration (GSA), federal agencies can access Grok for 42 cents per year for a period of 18 months. This contrasts with OpenAI and Anthropic, which charge $1 annually for their enterprise and government versions of ChatGPT and Claude, respectively.

The heavily discounted rate for federal agencies also includes technical support from xAI engineers to facilitate the integration of the AI system.

The 42-cent price point may also be a nod to Musk's known humor involving the number 420, often associated with cannabis culture, or a reference to his favorite book "The Hitchhiker's Guide to the Galaxy," where 42 is humorously presented as the ultimate answer to life, the universe, and everything.

Earlier this year, xAI was nearly approved as a GSA vendor, but negotiations reportedly stalled after Grok began producing antisemitic content and identifying itself as "HitlerBot." By late August, internal emails obtained by Wired revealed that the White House had directed the GSA to expedite xAI's inclusion on the list of approved vendors.

In addition to this deal, xAI has been selected alongside AI industry leaders like Anthropic, Google, and OpenAI for a $200 million contract with the Pentagon.

Following Donald Trump's inauguration, Musk founded and led the Department of Government Efficiency (DOGE), an initiative aimed at reducing government costs with mixed results. During this time, Musk placed several of his associates within agencies such as the GSA and other government bodies responsible for oversight and contract approvals—sectors where Musk also holds business interests.