This article first appeared on GuruFocus.
Elon Musk just notched a big milestone for his AI startup, xAI. The U.S. General Services Administration has cleared federal agencies to start using the company’s Grok models Grok 4 and Grok 4 Fast at a bargain price of just $0.42 per organization for the next 18 months.
That means government workers will soon have access to the same conversational AI Musk has been touting as a rival to ChatGPT. Thanks to President Trump and his administration, xAI’s frontier AI is now unlocked for every federal agency, Musk said, calling the deal a major step in helping Washington move faster with technology. GSA officials added that opening up access to advanced AI is part of building a more efficient and accountable government.
It’s a competitive play, too. OpenAI, Anthropic, and Google (NASDAQ:GOOG) have already signed similar government deals, but xAI is coming in cheaper than most and trying to steal some thunder.
At the same time, Musk’s startup is taking OpenAI to court, accusing it of poaching staff and stealing Grok trade secrets. The lawsuit sets the stage for yet another chapter in Silicon Valley’s escalating AI rivalry.