xAI Signs Landmark Agreement with U.S. General Services Administration (GSA) to Provide Grok at Symbolic Price
xAI has entered into a significant agreement with the U.S. General Services Administration (GSA). Under the deal, the company’s chatbot Grok will be offered to federal agencies for just $0.42 per organization over an 18-month period.
This symbolic pricing stands out as it is far below the fees typically charged by competitors such as OpenAI and Anthropic for similar enterprise AI solutions. The 42-cent figure is also seen as a nod to Elon Musk’s frequent references to “420” and to the number “42” as the “meaning of life” from The Hitchhiker’s Guide to the Galaxy.
The GSA’s “OneGov” agreement has been recorded as the longest AI access contract ever signed. Federal agencies will gain access to both Grok 4 and Grok 4 Fast models, with xAI engineers assigned to support the rapid integration of the technology into government operations.
Announcing the collaboration, Elon Musk emphasized that Grok is “among the world’s most powerful AI models” and argued the partnership would strengthen U.S. leadership in the global AI race.
xAI co-founder Ross Nordeen also commented: “Grok for Government, offered to each agency at just 42 cents, will mark a transformative shift in how government operations function.”
In addition to Grok’s baseline services, agencies will also have the option to upgrade to enterprise subscriptions compliant with FedRAMP and DoD Impact Levels, providing higher usage limits and advanced security features to support broader AI adoption.
It is worth noting that a previous collaboration between xAI and the GSA was temporarily suspended last year following concerns over antisemitic outputs generated by Grok. With this new deal, however, xAI demonstrates its renewed commitment to the federal market while positioning itself in direct competition with rivals OpenAI and Anthropic.
