
Elon Musk’s problematic Grok AI platform wins $200M Pentagon contract
- by New York Daily News
- Jul 14, 2025
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July 14, 2025 at 4:24 PM EDT
Elon Musk’s Grok artificial intelligence chatbot, which has been accused of spouting antisemitic content, has been selected by the Pentagon for a $200 million deal, the xAI company announced on Monday.
The huge deal comes as xAI rolls out Grok for Government, a suite of tools designed for use by federal, state and local governments, as well as national security operations.
Just days ago, xAI had to briefly suspend the AI tool because users found it was giving Nazi-friendly answers to questions like praising dictator Adolf Hitler and blaming Jews for various global woes.
xAI said its products, including its latest Grok 4 model, will now be available through the General Services Administration, which could lead to other federal agencies adopting it as their go-to chatbot.
The deal raises eyebrows because Musk recently broke with President Trump, ending the political partnership that helped the president win back the White House in 2024.
Trump has threatened to cut lucrative contracts with Musk’s companies, especially SpaceX, making it surprising that the Pentagon would choose xAI for the artificial intelligence deal.
Trump hasn’t commented so far on the Grok deal, and it’s not clear if it could wind up being a point of contention between the White House and the Pentagon.
Musk makes no secret of his hope to mold Grok into a challenger of what he considers the tech industry’s “woke” orthodoxy on flashpoint issues like race, gender and politics.
Along with spouting antisemitic content, Grok has been accused of gaming its system to parrot the views of its billionaire creator, and it has admitted it searches for Musk’s stance on an issue before offering up an opinion.
Built using huge amounts of computing power at a Tennessee data center, Grok amounts to Musk’s attempt to outdo rivals such as OpenAI’s ChatGPT and Google’s Gemini in building an AI assistant that shows its reasoning before answering a question.
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