Elon Musk's artificial intelligence startup Xai has signed a new agreement announced Thursday by the General Services Administration (GSA) to expand access to federal agencies to chatbot Grok.
According to Bloombergfederal agencies can purchase GROK AI models for $0.42 per organization under the contract. This is valid from Thursday until March 2027. GSA, which manages US government procurement, said its rival Openai is lower than the $1 per year, the charger for ChatGpt products.
This push comes as part of President Donald Trump's AI action plan to expand government use of AI and speed up development across the country.
OneGov Strategy Behind the Trading
The agreement falls under the GSA's “OneGov Strategy” introduced in April, making it easier for agencies to access new technologies. The programme aims to modernize the way governments purchase digital tools, standardize prices and contracts, and prevent duplication of transactions between institutions.
Alongside Xai, major tech companies such as Meta, Google, Anthropic and Openai have also attacked new partnerships with the federal government to provide AI products to institutions since the spring.
According to the GSA, the XAI transaction is the lowest cost and longest-lasting contract ever signed under OneGov. As part of the agreement, Xai engineers will be available to help institutions integrate GROK and deploy it into their business.
“Wide range of access to advanced AI models is essential to creating the efficient and accountable government that taxpayers deserve,” Federal Acquisition Services Commissioner Josh Gruenbaum said in a statement.
“Because we partner with GSA and our commitment to engineers, we value accelerating GROK's adoption and transforming government operations,” he added.
Xai accuses Openai of stealing a trade secret
Xai sued rival Openai in California federal court, where he allegedly stole trade secrets to gain an unfair advantage in the race to develop AI technology.
The lawsuit filed said Openai is engaged in a “deeply troubling pattern” in which former Xai employees can hire access to trade secrets related to the AI chatbot Grok.
“Openai targets individuals with knowledge of Xai's key technologies and business plans (including Xai's source code and operational benefits in launching data centers), and subsequently directs those employees to infringe other obligations to Xai through illegal means,” the lawsuit states.
Musk's Company competes directly with Openai, Meta and Google's parent alphabets to gain a lead in the Global AI Market. Xai has recently raised more than $10 billion in funding and raised its valuation to $200 billion.
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