xAI’S Grok secures spot in $800M DoD AI modernization push

Jul 15, 2025 at 09:08 AM CDT

William Jackson (Producer), Craig Nigrelli (Anchor/Reporter)

Image credit: Thomas Fuller/SOPA Images/LightRocket via Getty Images

Summary

Grok contract

The Pentagon awarded xAI a contract as part of an $800 million initiative to integrate frontier AI into national security operations. Grok 4 and other tools will be available through federal purchasing channels for use in classified environments.

DoD AI expansion

The Chief Digital and Artificial Intelligence Office (CDAO) awarded $200 million contracts each to xAI, OpenAI, Google and Anthropic. These partnerships aim to apply frontier AI to military, intelligence and enterprise workflows.

Controversy and oversight

xAI faced backlash after Grok generated antisemitic content, which the company said stemmed from prompt compliance and was quickly patched.

Full story

The Pentagon has agreed to use Grok, an artificial intelligence chatbot developed by Elon Musk’s company xAI, as part of a $200 million contract. The Grok for Government suite will allow local, state and federal agencies — including national security operations — to access xAI’s latest frontier AI models.

According to xAI, the offerings include Grok 4, the company’s most advanced system to date, along with tools like Deep Search and specialized government applications. The General Services Administration will list the products on its schedule, making them available to all federal agencies.

The same Department of Defense initiative awarded $200 million to Anthropic, Google and OpenAI contracts.

What will the Pentagon use Grok for?

The Department of Defense has not disclosed specifics but confirmed Grok will support national security and scientific missions. The xAI contract outlines options for deploying AI in classified environments, with support from U.S. government-cleared engineers. Planned use cases include healthcare, fundamental science and defense innovation.

Select agencies will have access to custom Grok versions and technical support.

xAI emphasized the goal of improving government operations and accelerating progress in unresolved scientific and security challenges.

“The adoption of AI is transforming the Department’s ability to support our warfighters and maintain strategic advantage over our adversaries,” said Chief Digital and AI Officer Dr. Doug Matty.

How have people received Grok’s rollout?

The announcement follows backlash over Grok’s online behavior. Last week, the chatbot generated antisemitic content and praised Adolf Hitler.

xAI said the issue stemmed from Grok being overly compliant with user prompts and “quickly” patched the system.

Despite the controversy, the Department of Defense proceeded with the contract.

What is the broader context of this deal?

The deal reflects the Trump administration’s push to expand AI use across federal agencies. In an April 2025 speech at the Army War College, Defense Secretary Pete Hegseth emphasized lethality, accountability and meritocracy — principles that defense officials say are now shaping the Pentagon’s approach to AI.

William Jackson (Producer)

William is a producer at Straight Arrow News, located in Omaha, Nebraska.

Craig Nigrelli (Anchor/Reporter)

Craig Nigrelli is an anchor and reporter for Straight Arrow News.

Jonah Applegarth (Production Specialist), Devan Markham (Morning Digital Producer), and Kaleb Gillespie (Video Editor) contributed to this report.

Tags: Chatbot, ChatGPT, Google, Grok, OpenAI, Pentagon, Pete Hegseth, xAI

Why this story matters

The awarding of a $200 million Department of Defense contract to Elon Musk's xAI to deploy its Grok chatbot for government and military use highlights the expanding integration of artificial intelligence in U.S. national security operations, despite recent controversies regarding the AI's output and ongoing debates about ethical safeguards and procurement practices.

Artificial intelligence in defense

The Department of Defense's investment in AI technologies like Grok signals a growing reliance on advanced artificial intelligence for national security missions, military operations and government efficiency.

Ethical and security concerns

Recent incidents, such as Grok generating antisemitic content and accusations of being overly influenced by user prompts, have raised significant concerns from both privacy advocates and lawmakers about the risks and oversight of deploying commercial AI systems in sensitive government contexts.

Government-industry collaboration

The contracts awarded to xAI and other leading AI companies represent a broader trend of increasing partnership between the federal government and private sector technology firms to accelerate innovation and maintain U.S. strategic advantage in a competitive global environment.

Get the big picture

Synthesized coverage insights across 116 media outlets

Community reaction

Several articles cite reactions from public officials and advocacy groups concerned about the recent antisemitic outputs generated by Grok. Some progressive politicians express outrage over allocating government funds to xAI amid these issues, emphasizing worries over ethical AI use and appropriate stewardship of public resources. Advocacy for greater transparency and oversight is also noted.

Context corner

The Pentagon’s adoption of commercial AI follows a larger trend of government reliance on private technology for strategic advantage. Recent policy shifts under the Trump administration include revoking a prior executive order on AI risk mitigation, encouraging faster integration of AI technologies. These moves reflect growing rivalry with international powers to lead in AI development for security purposes.

Do the math

Each awarded contract has a ceiling of $200 million, totaling up to $800 million if fully executed. The deals are structured over a two-year prototype period, with companies tasked to develop AI agent workflows for diverse defense and enterprise functions. This funding is a minor fraction compared to the overall U.S. defense budget, which exceeds $800 billion annually.

U.S.

8 hrs ago

3 min read

Just 16 of 614 arrested in Chicago’s ‘Midway Blitz’ had criminal records
International

9 hrs ago

2 min read

Clashes in Mexico City as ‘Gen Z’ protests leave 120 injured, 20 arrests
U.S.

12 hrs ago

2 min read

Saudi company emerges as frontrunner to buy Warner Bros. Discovery
U.S.

12 hrs ago

2 min read

One winner of nearly $1 billion Mega Millions jackpot

Sources

Bias comparison

Media outlets on the left frame the Pentagon’s $200 million contract to Elon Musk’s xAI chiefly as a problematic endorsement amid Grok’s antisemitic chatbot outputs, employing loaded terms like “racist” and “bad idea” to emphasize controversy and conflict of interest, often linking Musk to a fraught Trump legacy.
Media outlets in the center provide a restrained narrative situating contracts within regulatory competition and innovation.
Media outlets on the right highlight the contract as a pragmatic push toward “frontier AI” and national security advancement, using positive, action-oriented phrases like “pens deal” and “address national security challenges,” while largely downplaying Grok’s offensive incidents.

Report an issue with this comparison

Media landscape

Click on bars to see headlines

116 total sources

Key points from the Left

The Department of Defense awarded a contract worth up to $200 million to Elon Musk's company xAI for the AI chatbot Grok for government purposes, including national security applications and healthcare tools.
The Chief Digital and Artificial Intelligence Office confirmed this deal will help develop advanced AI workflows to accelerate capabilities in various military and government operations.
xAI introduced an initiative called "Grok for Government," enabling federal agencies to purchase its technologies through the General Services Administration.
The announcement followed public backlash against Grok due to inappropriate responses, prompting xAI to apologize for its chatbot's behavior.

Report an issue with this summary

Key points from the Center

On Monday, the U.S. Department of Defense awarded agreements potentially worth as much as $200 million each to OpenAI, Google, Anthropic and Elon Musk’s xAI to advance AI technologies.
These awards came in the wake of a directive issued by the White House in April aimed at encouraging the use of AI, coinciding with initiatives to enhance AI capabilities for addressing national security needs.
XAI announced Grok for Government, a product suite including its latest chatbot Grok 4, that makes AI models available to federal, state, local and national security customers.
Doug Matty, the Department of Defense's lead official for digital and AI initiatives, stated that these contracts will support the creation of autonomous AI systems designed to assist military personnel and ensure continued strategic superiority over rival nations.
These contracts deepen collaboration between leading AI firms and the DoD and reflect increasing federal AI adoption despite concerns over competitive contracting and regulatory changes.

Report an issue with this summary

See Hide headlines from Center sources 33 sources

Key points from the Right

The Pentagon awarded contracts totaling $800 million to Anthropic, Google, OpenAI and xAI to enhance AI capabilities for national security needs, as stated by the Department of Defense.
Each company, including xAI, will receive up to $200 million to support various mission areas, according to a press release from the Chief Digital & AI Office.
The contracts aim to develop agentic AI workflows, enhancing the DoD's ability to respond to national security challenges, said Chief Digital and AI Officer Doug Matty.
This move follows increasing tensions in the AI race with China, highlighting a shift towards using commercial tech in defense, as noted in the Pentagon's announcement.

Report an issue with this summary

Other (sources without bias rating):

See Hide headlines from Other sources 40 sources

Powered by Ground News™

Sources