Pentagon-xAI deal: Musk-owned AI bags $200 million defence contract; days after Grok chatbot's anti-Semitic row
The Pentagon has awarded contracts to several leading US artificial intelligence firms, including Elon Musk's xAI, despite the company coming under fire recently for offensive content generated by its chatbot Grok.
Announced on Monday, the contracts with xAI, Anthropic, Google, and OpenAI each carry a ceiling value of $200 million, according to the Pentagon's chief digital and artificial intelligence office (CDAO).
The awards aim to allow the department of defense 'to leverage the technology and talent of US frontier AI companies to develop agentic AI workflows across a variety of mission areas,' the CDAO said in a statement, quoted by AFP.
xAI's inclusion follows renewed criticism of the company over Grok's controversial responses, which surfaced after a July 7 update. The chatbot had praised Adolf Hitler, condemned 'anti-white hate,' and claimed Jewish representation in Hollywood was 'disproportionate.'
xAI has since apologised and said it corrected the instructions that led to those outputs.
The latest version, Grok 4, released on Wednesday, also drew scrutiny after appearing to mirror Elon Musk's views in some of its responses.
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The contract award comes even asMusk remains locked in a public spat with US President Donald Trump. Though Musk had been a key supporter of Trump's recent presidential campaign and was tasked with leading the cost-cutting agency Doge, he stepped down in May. He later criticised Trump's major budget bill, accusing it of inflating government debt, prompting a series of heated public and social media exchanges. Musk eventually apologised for some of his more aggressive remarks.
Despite the tension, the government and defence sector is being seen as a promising new frontier for AI firms.
xAI, on Monday, announced the launch of its 'Grok for Government' service, following a similar initiative from OpenAI. With its name now added to an official supplier list, xAI said all federal departments and agencies can now procure its products.
Elsewhere, Meta has teamed up with defence start-up Anduril to develop virtual reality headsets for military and police use.
OpenAI had already secured a Pentagon deal in June, also capped at $200 million.
'Establishing these partnerships will broaden DoD use of and experience in frontier AI capabilities and increase the ability of these companies to understand and address critical national security needs with the most advanced AI capabilities US industry has to offer,' the CDAO said.
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