xAI Secures Government Contracts Despite Musk-Trump Feud

xAI has launched "Grok for Government," a suite of AI products for US government customers, despite Elon Musk's public feud with President Trump. xAI has secured a partnership with the Department of Defense and made products available for purchase via the GSA schedule, allowing government departments to sign contracts with the company. The Trump/Musk feud may be a smokescreen, enabling Musk to win government contracts with less scrutiny.

xAI, the AI startup co-founded by Elon Musk, has made significant strides in securing government contracts, despite ongoing public feuds between Musk and former U.S. President Donald Trump. The company has announced "Grok for Government," a suite of AI products tailored for U.S. federal agencies, and secured a $200 million contract from the Department of Defense (DoD).

The contract, announced on July 14, 2025, includes a $200 million ceiling, allowing xAI to develop advanced AI solutions for various mission areas within the DoD. Additionally, xAI products are now available for purchase through the General Services Administration (GSA) schedule, making them accessible to any federal agency without lengthy bidding processes [2].

xAI's Grok for Government suite includes the latest Grok 4 model, which the company claims outperforms rivals on key benchmarks. The products also offer features such as Deep Search for comprehensive information gathering and tool integration capabilities, along with custom models for national security and critical science applications [2].

The partnership with the DoD is part of a broader effort by the agency to adopt commercial AI capabilities. According to Doug Matty, the DoD's Chief Digital and Artificial Intelligence Officer, the goal is to leverage the technology and talent of U.S. frontier AI companies to develop agentic AI workflows across various mission areas [1].

The Trump-Musk feud, which has been ongoing since June 2025, may have inadvertently benefited xAI in securing these government contracts. With the public focus on their feud, xAI may have received less scrutiny and more favorable attention from government officials [4].

This government embrace reflects a broader shift in Silicon Valley's relationship with defense work. Companies previously avoiding military contracts are now actively pursuing them, as seen with OpenAI, Anthropic, and Meta [2].

The contracts come at a crucial time for xAI, which recently raised $6 billion in December 2024 and is valued at $80 billion. The government endorsement could help legitimize Grok in the broader market and provide a steady revenue stream [2].

References:
[1] https://www.cnbc.com/2025/07/14/anthropic-google-openai-xai-granted-up-to-200-million-from-dod.html
[2] https://www.maginative.com/article/xai-launches-grok-for-government-announces-dod-contract/
[4] https://en.wikipedia.org/wiki/Trump%E2%80%93Musk_feud