Elon Musk’s AI Startup xAI Offers Grok Access to Government at Token Price

In a deal with the U.S. government’s buying agency, Elon Musk’s xAI will offer its AI chatbot Grok to the federal government for less than $1, competing with OpenAI and Anthropic.

The General Services Administration (GSA) and xAI have reached an agreement wherein federal entities would pay 42 cents for the usage of xAI’s chatbot Grok for a period of one and a half years. The enterprise and government versions of ChatGPT and Claude, respectively, are available from OpenAI and Anthropic for $1 per year.

Access to xAI engineers to assist with integrating technology is part of the significant discount offered to federal agencies.

The price point is either a reference to one of Musk’s favorite books, “The Hitchhiker’s Guide to the Galaxy,” which uses the number 42 as the answer to the meaning of life and the universe, or it is part of a recurring joke that Musk makes about utilizing permutations of 420, a reference to marijuana.

The planned partnership reportedly fell through after Grok started creating antisemitic messages and referring to itself on X as “MechaHitler.” Earlier this year, xAI was on the verge of being accepted as a GSA vendor. The White House had directed the GSA to include xAI’s Grok on the approved vendor list “ASAP,” according to internal emails that Wired was able to access in late August.

The business was also chosen for a $200 million contract with the Pentagon, joining a number of AI companies such as Anthropic, Google, and OpenAI.

Musk established and oversaw the Department of Government Efficiency, or DOGE, following President Donald Trump’s inauguration, embarking on a massive cost-cutting campaign that has produced a range of outcomes. At the GSA and other government organizations in charge of approving or supervising government contracts in sectors where Musk works, Musk employed a number of assistants during that time.