Musk’s xAI inks deal with Trump admin to aid federal AI modernization

WASHINGTON — The General Services Administration finalized a deal with Elon Musk’s xAI to access Grok 4 and Grok 4 Fast through March 2027, giving federal agencies the ability to deploy the company’s AI models and tools in government workstreams. The agreement is described by the GSA as the longest-term “OneGov AI” arrangement to date. While the total price has not been publicly released, the GSA said access to Grok 4 models will be available for $0.42 per federal agency, with options to upgrade features and increase rate limits as needed. xAI will also provide training programs to help agencies adopt the technology and integrate it into existing workflows.

Under the deal, xAI will not only provide access to Grok 4 but also help tailor the company’s AI tools for government use, assisting agencies in implementing the technology across various workstreams. The GSA emphasized that the arrangement aims to simplify procurement for AI systems across the federal government, potentially speeding up deployments and reducing the complexity of navigating multiple agency contracts.

A White House official told The Post that the relationship between Elon Musk and President Donald Trump is separate from the business deal with xAI, and negotiations for the agreement occurred weeks ago. The official stressed that the two men’ s personal dynamic should not be read as a guarantee of future collaboration at the highest levels of government. The White House’s stance comes as both figures have publicly signaled receptivity to AI-related cooperation in the past, even as their public interactions have included sharp disagreements on policy.

The deal arrives amid a complicated public dynamic between Musk and Trump. The two sat together at Charlie Kirk’s memorial service in Arizona on Sunday, and Trump later described a brief, cordial exchange with Musk. A White House adviser has suggested that while their paths have crossed, substantial movement on policy or formal roles remains unlikely in the near term.

The agreement also fits into a broader U.S. push to modernize federal IT and AI adoption following the AI Action Plan released in July, which followed an executive order issued in January to outline plans for deploying AI across government. The GSA recently signaled renewed priorities, including rehiring hundreds of federal workers who had been laid off as part of earlier belt-tightening, a move viewed as part of the administration’s effort to scale up implementation of new technologies.

Industry observers note that Grok will face stiff competition from established AI chatbots and models, including the broader field of large language models used across both private and public sectors. Still, officials framed the agreement as a pragmatic step toward enabling agencies to modernize infrastructure, with xAI’s engineers assisting in the integration and ongoing training to ensure government staff can operate the tools effectively. Federal Acquisition Service Commissioner Josh Gruenbaum said the arrangement would help deliver an efficient, accountable government that taxpayers deserve and supports America’s position in the global AI race.

The General Services Administration manages shared procurement and real estate assets for the federal government, including more than $110 billion in contracts. The Grok deal is intended to streamline purchases of AI systems across agencies, reducing duplication and enabling faster upgrades as the technology evolves. While the deal signals a notable link between Musk’s xAI and the Trump administration, officials stressed that the partnership does not imply a broader political alliance, and there should be no expectation of a return to the Oval Office for Musk in the near term. The arrangement highlights how the government is trying to balance cutting-edge technology adoption with the need for careful oversight and procurement discipline.