Key points
- Musk and President Trump have publicly feuded in recent weeks
- Musk has criticised Trump’s budget bill for increasing government debt
- Govt and defence sector are considered growth driver for AI giants
NEW YORK, United States: The Pentagon announced contracts on Monday with multiple leading US artificial intelligence firms including Elon Musk’s xAI.
Each of the contracts to xAI, Anthropic, Google and OpenAI have a ceiling value of $200 million, the Pentagon’s Chief Digital and Artificial Intelligence Office (CDAO) said in a statement, according to AFP.
🚨 CDAO is excited to announce contract awards to leading U.S. frontier AI companies – Anthropic, Google, OpenAI, and xAI – to address critical national security challenges. Read more: https://t.co/mLDDQgcAEK pic.twitter.com/dkLBQRWXFm
— DOD Chief Digital & AI Office (@DODCDAO) July 14, 2025
The awards will enable the Department of Defense “to leverage the technology and talent of US frontier AI companies to develop agentic AI workflows across a variety of mission areas,” it said.
Announcing Grok for Government – a suite of products that make our frontier models available to United States Government customers
We are especially excited about two new partnerships for our US Government partners
1) a new contract from the US Department of Defense
2) our…— xAI (@xai) July 14, 2025
The contract with xAI comes just days after the company was forced to apologise for controversial posts by its Grok chatbot.
We’re announcing a $200M ceiling contract with the U.S. Department of Defense.
Through hands-on prototyping and direct collaboration across the Department, we will help enhance U.S. national security and responsible AI deployment.
— Anthropic (@AnthropicAI) July 14, 2025
The release on Wednesday of Grok 4, the latest chatbot version, was almost met with scrutiny after it appeared to consult Musk’s positions on some questions it was asked before responding.
READ ALSO: Trump and Musk Clash Online Over Impeachment, Epstein, and Power
The contract between xAI and the Department of Defense comes even as Musk and President Donald Trump have publicly feuded in recent weeks.
Trump’s budget bill
Musk, a top backer of Trump’s most recent presidential campaign, was entrusted with managing the new agency known as DOGE to massively slash government spending under the current administration.
After ending his assignment in May, the South African-born entrepreneur publicly criticised Trump’s major budget bill for increasing government debt.
The president and the businessman engaged in heated exchanges on social media and in public statements before Musk apologised for some of his more combative messages.
READ ALSO: Trump Slams Former Ally Musk’s Political Party As “Ridiculous”
The government and the defence sector are considered a potential growth driver for AI giants.
“Grok for Government”
Musk’s xAI announced on Monday the launch of a “Grok for Government” service, following a similar initiative by OpenAI.
Introducing Grok 4, the world’s most powerful AI model. Watch the livestream now: https://t.co/59iDX5s2ck
— xAI (@xai) July 10, 2025
In addition to the Pentagon contract, “every federal government department, agency, or office (can now) purchase xAI products” thanks to its inclusion on an official supplier list, xAI said.
Meta partners with Andruil
Meta meanwhile has partnered with the start-up Anduril to develop virtual reality headsets for soldiers and law enforcement.
OpenAI had previously announced in June that it had secured a Defense Department contract with a ceiling of $200 million.
“Establishing these partnerships will broaden DoD use of and experience in frontier AI capabilities and increase the ability of these companies to understand and address critical national security needs with the most advanced AI capabilities U.S. industry has to offer,” said the CDAO statement on Monday, according to AFP.
“AI for humanity”
The growing partnership between AI firms and defence sector has attracted its share of criticism. TRT World in December 2024 reported OpenAI has tossed its “AI for humanity” mission statement out the window as it partners up with US weapons manufacturer Anduril Industries to create AI warfare tech.
