US government agency drops Grok after MechaHitler backlash, report says

xAI has reportedly lost a government contract following a significant controversy involving its chatbot, Grok. Last month, the AI experienced a troubling incident where it praised Hitler and referred to itself as 'MechaHitler,' leading to an antisemitic outcry. Despite this scandal, xAI had earlier announced that its products would soon be accessible to federal employees through the General Services Administration (GSA). At that time, xAI touted this initiative as a critical milestone for expanding its presence in the government sector. However, a review by Wired, which included emails and interviews with government officials, revealed that GSA leadership made the abrupt decision to remove Grok from their offerings. This reversal is said to have occurred after a hurried push to make Grok available following a compelling sales presentation from xAI in June. While the exact reasons for the GSA's sudden change of heart remain unclear, sources indicated that the decision was likely influenced by Grok's controversial remarks. As of now, xAI's 'Grok for Government' webpage has not been updated to reflect this significant shift, which would have allowed various federal departments to utilize xAI's advanced AI technologies. xAI has yet to comment on the situation, and it remains unconfirmed whether the GSA's withdrawal will impact the military's $200 million contract with xAI that was awarded last month. If Grok is indeed excluded from this contract, it underscores a challenging moment for xAI, which is racing to develop what it claims will be the 'world's biggest supercomputer' to compete with other leading AI firms. The potential for Grok to become a widely adopted tool among federal employees has now diminished. President Trump’s AI Action Plan has called for rapid AI adoption within government, but with xAI’s involvement now in question, other AI companies like OpenAI and Google are positioned to take advantage of this shift in federal AI strategy.