Pentagon awards AI contracts to Musk's xAI, three other companies
July 15 (UPI) -- The Department of Defense has announced contracts with four leading artificial intelligence companies, including Elon Musk's xAI, a week after its Grok chatbot allegedly disseminated racist rhetoric online.
The contracts, each with a cap of $200 million, were announced Monday by the Chief Digital and Artificial Intelligence Office. In a statement, the office said it awarded the contracts to Anthropic, Google, OpenAI and xAI "to accelerate Department of Defense adoption of advanced AI capabilities to address critical national security challenges."
They will develop "agentic AI workflows across a variety of mission areas" while deepening the Pentagon's relationships with these companies so they can better understand and address critical national security needs "with the most advanced AI capabilities U.S. industry has to offer."
"The adoption of AI is transforming the Department's ability to support our warfighters and maintain strategic advantage over our adversaries," Chief Digital and AI Officer Doug Matty said.
"Leveraging commercially available solutions into an integrated capabilities approach will accelerate the use of advanced AI as part of our Joint mission-essential tasks in our warfighting domain as well as intelligence, business and enterprise information systems."
The move aligns with the Trump administration's adoption of AI into the federal government and its support for commercial growth. An executive order he signed during his first days back in the White House aims to enhance the United States' dominance in the industry.
xAI said in a statement Monday that the Defense Department contract is part of its Grok for Movement project, which it described as "a suite of frontier AI products" available to U.S. government customers.
"These customers will be able to use the Grok family of products to accelerate America -- from making everyday government services faster and more efficient to using AI to address unsolved problems in fundamental science and technology," it said.
The announcement, however, comes as Musk and xAI continue to deal with the fallout after Grok raised the ire of politicians and foreign governments by making posts on July 8 that allegedly celebrated Adolf Hitler and contained other anti-Semitic and hateful statements on X, the social media platform Musk also owns. The official X account for Grok has said the offending posts have been removed.
After the announcement that xAI had been among those awarded a lucrative Department of Defense contract, Sen. Elizabeth Warren, a Democrat from Massachusetts, quipped online: "This is the same Grok that was 'manipulated' into praising Hitler last week. What could possibly go wrong when integrating AI into our national security?"
Though Trump and Musk have had a recent and public falling out, the deal with xAI has raised ethics concerns as the Tesla and SpaceX owner spent nearly $300 million on Trump's election campaign.
"Despite the social media wars, the Trump-Elon corruption machine is alive and well," Rep. Becca Balint, a Democrat from Vermont, said online in reaction to the deal.
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