Elon Musk’s xAI Lands $200M Pentagon Contract for AI Tools

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Elon Musk’s xAI Lands $200 Million Pentagon Contract for AI Tools

Written by Aaron S.,

Editor-In-Chief

Last Updated: July 15, 2025

Key Takeaways

xAI signed a $200 million deal with the Pentagon to supply AI tools for military and civilian use;
The CDAO said private AI tech will help the government act faster and improve operations;
xAI launched Grok for Government to aid learning, problem-solving, and planning.

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Elon Musk’s xAI Lands $200 Million Pentagon Contract for AI Tools

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xAI, the artificial intelligence (AI) company founded by Elon Musk, has signed a $200 million agreement with the US Department of Defense.

The company will provide AI tools designed for use by government workers, including those in military and civilian roles.

The contract was announced by the Department’s Chief Digital and Artificial Intelligence Office (CDAO) on July 14. It said the goal is to use modern AI technology across various tasks, from military planning to everyday administrative work.

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Dr. Doug Matty, head of the CDAO, stated that the new tools will help improve how the Department supports its personnel and stays ahead of global threats.

He explained that using AI from private companies would help the government move faster and bring advanced technology into areas such as defense, intelligence, business, and data systems.

In a July 14 press release, xAI noted that the company aims to build technology that helps people learn and solve problems. It also introduced "Grok for Government", a set of AI tools that includes Grok 4 and Deep Search.

xAI also pointed to the importance of public investment in science and technology. It said that strong support in these areas helped make the company’s work possible and that it hopes to give back by contributing to national projects.

Recently, xAI raised $10 billion through a mix of debt and equity. What is the purpose of the funding? Read the full story.