Elon Musk's artificial intelligence (AI) startup xAI won a contract to supply an AI chatbot to the U.S. government by offering a lower price than OpenAI.
The U.S. General Services Administration (GSA) said on the 25th (local time) that it signed an agreement with xAI to make the "Grok" model available to agencies for $0.42 (42 cents; 593 won). The GSA said, "This singular offering is valid for 18 months, the longest term in the history of federal government AI contracts," adding that "it applies through March 2027."
The contract also includes access to xAI's high-performance reasoning models "Grok 4" and "Grok 4 Fast." Since April this year, the GSA has pursued a unified AI procurement policy for federal agencies under the name "OneGov." The aim is to streamline AI procurement procedures and accelerate AI adoption by federal agencies.
Local media, including Bloomberg News, noted that the contract between xAI and the government is priced lower than OpenAI and Anthropic. OpenAI supplies AI chatbot services and more to agencies for $1 per agency. The industry is offering various interpretations of the 42-cent figure. Some say it was inspired by the symbolic number "420," which Musk often mentions, or is a variation on 42, the ultimate answer in the novel he recommends, "The Hitchhiker's Guide to the Galaxy."
Meanwhile, xAI also sought to register as an official GSA supplier early this year, but the effort fell through amid the "Mecha Hitler" controversy. Grok 3 sparked controversy by generating antisemitic expressions and referring to itself as "Mecha Hitler," among other things.