On Thursday, 25 September 2025, US President Donald Trump authorised a landmark agreement with Elon Musk’s company xAI. The deal, approved through the General Services Administration (GSA), grants all US federal agencies access to Grok, Musk’s advanced artificial intelligence system.
The contract, which lasts until March 2027, is the longest OneGov AI deal ever signed. The cost is what caught global attention. Each agency will only pay 42 cents for 18 months of access, raising questions about how and why such a price was set.
Donald Trump Says Yes to Elon Musk’s Grok
The GSA gave the green light after reviewing Musk’s offer that included Grok 4 and Grok 4 Fast, two of xAI’s latest reasoning models. According to Musk, xAI provides ‘the most powerful AI compute and most capable AI models in the world’. According to Newsweek, Musk thanked Trump and his administration for making these tools available to every federal agency, saying it will allow the government ‘to innovate faster and accomplish its mission more effectively than ever before’.
Federal Acquisition Service Commissioner Josh Gruenbaum stated that giving agencies broad access to advanced AI will help build a more efficient and accountable government. Ross Nordeen, co-founder of xAI, confirmed that engineers from the company will work closely with departments to make sure Grok is deployed smoothly.
What Will Grok Be Used For?
The GSA highlighted that Grok will be introduced across agencies to streamline daily workflows. The tool will automate paperwork, provide faster responses, and help coordinate tasks between departments. Grok will also support data analysis and enhance transparency, helping officials make informed decisions at a quicker pace.
Engineers from xAI will be embedded within agencies to help with rapid rollouts. This direct involvement should prevent delays and provide technical support as federal staff begin using the system. The Trump administration also views this deal as part of its broader push to keep the US competitive in global AI development. Similar partnerships have been made recently with Microsoft and Meta.
Grok Subscription for Us Government Only at 42 Cents
The price of just 42 cents per agency has sparked debate. By comparison, OpenAI and Anthropic charge $1 (£0.75) per year for government access to their AI systems. Analysts have pointed to different explanations for Musk’s unusual pricing.
Some believe it may connect to his long-standing use of the number 420 in jokes, as per TechCrunch. Others note the possible link to the book ‘The Hitchhiker’s Guide to the Galaxy’, where 42 is presented as the answer to the meaning of life.
Despite the symbolic cost, the deal includes significant support. Each agency will receive help from xAI engineers during integration, adding value that far outweighs the tiny subscription fee.
US Now Embracing AI Even More
This agreement supports the Trump administration’s AI Action Plan, which calls for wider use of AI across government. More than 30 consumer groups had urged officials to block the deal, raising concerns about bias and neutrality. The White House moved forward regardless, showing its determination to speed up adoption.
In September alone, the government also signed major AI contracts with Microsoft and Meta. Microsoft’s deal, worth billions, is projected to save the country $6 billion (£4.49 billion) in three years. Meta partnered with the GSA to expand access to its Llama models.
Together with Musk’s Grok, these partnerships mark a clear turn. Washington is placing AI at the heart of its federal operations, making technology a central part of government planning and performance.
Originally published on IBTimes UK
