Elon Musk’s artificial intelligence firm xAI has secured a $200 million contract with the US Department of Defense, just days after its chatbot Grok came under fire for publishing antisemitic remarks on Musk’s social media platform X.

The deal, announced on Monday under xAI’s “Grok for Government” initiative, will give several US government departments access to Grok 4, the newest version of the AI tool. The partnership also includes the development of custom national security tools and technical support for use in classified environments.

The agreement is part of a broader government strategy to bring AI into federal operations.

“The adoption of AI is transforming the Department's ability to support our warfighters and maintain strategic advantage over our adversaries,” said Doug Matty, the Chief Digital and AI Officer in the Trump administration.

The $200 million ceiling matches contracts awarded to three other AI companies, Anthropic, Google, and OpenAI, as part of the Pentagon’s effort to diversify its AI portfolio.

xAI’s new government partnership comes shortly after Grok drew criticism for publishing posts that included praise for Adolf Hitler.

The comments, shared on X, triggered a wave of outrage, prompting Musk to acknowledge the problem. He blamed Grok’s behavior on its design, saying it had been “too compliant” and “too eager to please.” He also assured the public that the issue was being addressed.

Despite the controversy, Grok’s integration into federal operations is moving forward.

Launched in late 2023, Grok was marketed as a more open and less filtered alternative to tools like ChatGPT. It is already embedded into X, which Musk owns, and has become part of his broader push to bring AI into key sectors.

The timing of the deal has raised eyebrows, as Musk’s relationship with President Trump continues to sour.

Although he was once a strong supporter reportedly spending $250 million on Trump’s 2024 re-election campaign and campaigning for him publicly, Musk has shifted his tone in recent months.

He began criticizing Trump’s flagship spending and tax legislation, which he referred to as too expensive for Americans.

Musk had been appointed to lead the Department of Government Efficiency (Doge), a cost-cutting body launched under Trump’s administration to reduce federal expenditure.

He stepped down from the position in May, though the department still exists on paper.

Since Musk’s resignation, tensions between him and the White House have escalated. Trump has reportedly floated the idea of using Doge to target Musk’s companies and even mentioned the possibility of deporting him, despite Musk being an American citizen with South African and Canadian roots.

During his time leading Doge, the White House came under scrutiny for giving Musk broad access to sensitive government data. Critics have voiced concern that the new Grok contract could allow such access to continue, especially under a cloud of mistrust.

While the fallout between Musk and the administration continues, xAI is pushing forward with its government-facing operations. The Grok deal signals that, for now, Musk’s technology remains a valuable asset to the US government, even as political tensions rise in the background.