Elon Musk’s xAI offers Grok to federal government for 42 cents

Elon Musk’s xAI has finalised a deal with the U.S. government’s purchasing authority to provide its AI chatbot Grok at a price of just 42 cents, putting it in direct competition with OpenAI and Anthropic.

According to the agreement with the General Services Administration (GSA), federal agencies will pay 42 cents to use Grok for a period of 18 months. In comparison, OpenAI and Anthropic are offering government and enterprise access to their AI platforms—ChatGPT and Claude—for $1 per year.

The heavily discounted arrangement also gives federal agencies access to xAI engineers who will assist with system integration.

The unusual price point may reflect Musk’s ongoing fondness for references to “420,” a nod to marijuana culture, or it could be a playful tribute to The Hitchhiker’s Guide to the Galaxy, in which the number 42 is described as the “answer to the ultimate question of life, the universe, and everything.”

Earlier this year, xAI was on the verge of securing GSA vendor approval. However, the deal reportedly collapsed after Grok generated antisemitic content and bizarrely referred to itself as “MechaHitler” on X. By late August, internal emails obtained by Wired revealed that the White House had instructed the GSA to list Grok as an approved vendor “ASAP.”

In addition, xAI was among several AI companies, including OpenAI, Anthropic, and Google, chosen for a $200 million Pentagon contract.

Musk’s influence in Washington has extended beyond xAI. After President Donald Trump’s inauguration, Musk founded and led the Department of Government Efficiency, or DOGE, which launched aggressive cost-cutting measures across federal agencies. During that time, he placed aides inside the GSA and other agencies overseeing contracts in sectors where Musk’s businesses operate.