"Even the ugliest feuds with President Donald Trump seem to end with "the Art of the Deal."The U.S. government just inked a deal to put Elon Musk's Grok AI inside federal agencies for 42 cents per agency-a bargain that the government called "unique" and could reset Musk's rocky relationship with Trump and scramble the fight over which models dominate Washington."
"It's the latest in a string of deals that the U.S. General Services Administration (GSA), the agency responsible for technology procurement, has made with the top AI companies - Alphabet's Google; the ChatGPT maker, OpenAI; and Anthropic - as part of its new initiative, the OneGov agreement. Each of these deals are short-term - to prevent one model dominating, the GSA said - but Grok's is the longest, with an 18- month contract."
"xAI's Grok 4 Fast is priced per output, and generally agencies might be on the hook for hefty API licencing fees. "We really like the notion of having strong competition and market tension between these models and these companies," Federal Acquisition Service Commissioner Josh Gruenbaum told the Wall Street Journal in an interview. "When someone goes and updates their model with a cool feature, that only encourages the others to go do the same thing.""
The U.S. General Services Administration (GSA) signed short-term OneGov agreements with leading AI companies to give federal agencies access to multiple models and avoid single-model dominance. Elon Musk’s xAI Grok 4 Fast secured an 18-month contract priced at 42 cents per agency, while Google charged 47 cents, OpenAI and Anthropic set $1, and Meta offered free access to Llama models. Grok’s per-output pricing could still expose agencies to API licensing costs. The GSA framed the approach as encouraging competition and market tension so that feature updates by one provider spur improvements from others. The deal may ease Musk-Trump tensions.
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