xAI's Grok AI Model Offered to US Government at Discounted Rate

Sep 25, 2025
Elon Musk's xAI has secured a deal with the U.S. General Services Administration to provide its Grok AI models to federal agencies at a cost of 42 cents per organization, effective until March 2027.
xAI's Grok AI Model Offered to US Government at Discounted Rate

xAI has reached an agreement with the U.S. General Services Administration (GSA) to offer its Grok AI models to federal agencies at a significantly reduced rate. According to Bloomberg, the deal allows agencies to purchase Grok models for 42 cents per organization, effective through March 2027.

The agreement includes Grok 4 and Grok 4 Fast, which are described as xAI's most advanced reasoning models. This pricing is notably lower than the $1 per year charged by competitors like OpenAI for their ChatGPT service. As part of the deal, xAI engineers will assist agencies with the implementation of the models.

The GSA's OneGov strategy aims to modernize government technology procurement and ensure standardized pricing and terms. This initiative is part of a broader effort to accelerate AI adoption across federal agencies. The partnership with xAI offers the longest term and lowest price of any OneGov agreement to date.

Despite the competitive pricing, concerns have been raised about Grok's reliability, with critics pointing to instances of factually incorrect answers and politically biased commentary. However, the GSA has emphasized its commitment to continuously monitor and conduct safety benchmarks for the AI models.

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