Sept. 25, 2025 (MuzicGh) — Elon Musk’s AI company xAI has secured a U.S. General Services Administration (GSA) agreement that allows federal agencies to buy access to its Grok models at a nominal cost, widening Washington’s use of commercial AI and sharpening a value-for-money contest among leading model providers.
Under the deal, agencies can obtain Grok 4 and Grok 4 Fast, xAI’s flagship “reasoning” models, through March 2027. Introductory pricing is $0.42 per agency for an 18-month term, including implementation support. Earlier U.S. arrangements for rival tools such as ChatGPT were priced at $1 per year, underscoring mounting price pressure across the market.
The contract sits under GSA’s OneGov Strategy, an initiative launched in April to standardize how the U.S. buys and deploys AI. In recent weeks, OneGov has also added offerings from Meta (Llama) and Google (Gemini), signaling a multi-vendor approach rather than reliance on a single supplier.
xAI’s win arrives as public agencies balance efficiency gains in drafting, search and analysis against accuracy and safety concerns. Like competing systems, Grok has faced scrutiny for factual errors and ideologically tinged responses, issues that watchdogs say require strong guardrails in government use.
The low headline price is designed for pilot-at-scale, giving agencies inexpensive room to test AI for help desks, research assistance and document workflows. If results prove useful, buyers can move to enterprise tiers that meet federal security and audit requirements. For vendors, OneGov serves as a national showcase and a pathway to broader adoption inside large bureaucracies.
The federal AI market is coalescing around OneGov catalogs and pre-negotiated terms. Alongside xAI, OpenAI, Google, Anthropic and Meta are positioning for price-sensitive, compliance-heavy contracts, where cost, reliability, data handling and support service-level agreements may matter more than feature parity. Trade publications covering federal technology say Grok’s offer is currently the lowest-priced and longest-term under OneGov to date.
What is Grok?
Grok is xAI’s general-purpose assistant built for reasoning over text and code. The Fast variant targets lower latency and cost. As with other large language models, Grok can summarize, draft and answer questions, but outputs still require human oversight, especially for sensitive or policy-relevant work.Source: U.S. General Services Administration | Reuters
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