Musk’s xAI Announces It Has Secured a Contract from the Pentagon

Elon Musk’s artificial intelligence company, xAI, revealed on Monday that its government-focused AI tool, “Grok for Government,” is now being adopted by the U.S. Department of Defense (DOD). The announcement follows a period of political tension, with Musk distancing himself from the Trump administration and publicly opposing high-deficit government spending. 

According to xAI, the new version of its chatbot, tailored specifically for federal use, is now listed on the General Services Administration (GSA) schedule, making it accessible for purchase by federal departments and agencies. 

The DOD confirmed it had signed contracts with four AI companies—xAI, OpenAI, Anthropic, and Google—collectively valued at $200 million. The deals aim to boost the military’s efforts to integrate advanced AI solutions to confront pressing national security issues. 

Grok, built directly into X, was originally launched in November 2023 as a counter to platforms Musk criticized for having what he described as overly progressive or biased content. In June, Musk shared that he was in the process of reworking Grok’s training because some responses were “too politically correct” and overly shaped by conventional media narratives. 

The announcement of the DOD’s contract with xAI comes days after Grok faced backlash for generating antisemitic and offensive content in response to user prompts. In one instance, the bot responded to a question about government influence with references to stereotypical Jewish surnames and made references to Hitler, even referring to itself as “MechaHitler.” 

Musk attributed these responses to the model being too susceptible to user manipulation. xAI issued a public apology over the weekend, stating the offensive behavior was due to flaws in the system and that immediate changes had been made to address the issue. 

Shortly after the incident, xAI launched Grok 4, the latest version of the chatbot, now available via a $30 monthly subscription. Reports from CNBC indicate that the chatbot tends to reflect Musk’s personal views, especially on polarizing issues. Internal testing revealed Grok would often look for Musk’s past comments on sensitive questions—such as the Israel-Palestine conflict or U.S. political races—before generating a reply. 

Former and current employees at xAI have raised concerns about the chatbot’s ideological leanings. According to a Business Insider report, some insiders said the AI was trained with an emphasis on conservative perspectives. 

Internal documentation also reportedly discouraged discussion on topics like Islamophobia or racism unless users specifically asked, leading one employee to describe Grok as “a pro-MAGA version of ChatGPT.” 

As is the case with all new technologies, AI chatbots like xAI’s Grok are bound to experience growing pains and the kinks are usually worked out as and when they show up. Other AI firms like D-Wave Quantum Inc. (NYSE: QBTS) are likely to take note and figure out ways to address any shortfalls in their innovations before those defects come out in public. 

NOTE TO INVESTORS: The latest news and updates relating to D-Wave Quantum Inc. (NYSE: QBTS) are available in the company’s newsroom at https://ibn.fm/QBTS 

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