xAI beats OpenAI on price: Grok chatbot available to US agencies for 42 cents

Elon Musk's AI venture, xAI, has made headlines with a new agreement to provide its Grok chatbot to U.S. federal agencies, as confirmed by the General Services Administration (GSA) on Thursday. This development underscores the government's commitment to embracing artificial intelligence in its operations. The contract, which runs until March 2027, allows federal agencies to acquire Grok models for a mere 42 cents per organization. This pricing significantly undercuts OpenAI’s ChatGPT, which is available at $1 annually for comparable access, according to GSA officials. The deal includes xAI's advanced reasoning models, Grok 4 and Grok 4 Fast, with technical support from xAI engineers to facilitate smooth implementation. Agencies will also have the flexibility to upgrade to Grok enterprise subscriptions, which adhere to federal security protocols and offer enhanced features along with increased usage limits. However, the announcement has not been without controversy; critics have voiced concerns regarding Grok's reliability and neutrality. Reports of inaccurate answers and politically charged content have raised alarms about the trustworthiness of generative AI technologies. Moreover, advocacy groups have pointed out instances where the chatbot has generated offensive language or conspiracy theories, calling into question the effectiveness of its built-in safeguards. This initiative is part of the GSA's “OneGov Strategy,” aimed at standardizing technology procurement and promoting AI integration across various government sectors. Other notable AI providers involved in this strategy include OpenAI, Meta Platforms, Alphabet’s Google, and Anthropic. In a related development, Meta’s Llama model has also been authorized for federal use, available at no cost to agencies, further diversifying the AI resources accessible to government bodies. In another twist, xAI has initiated legal proceedings against OpenAI, alleging the latter has unlawfully appropriated trade secrets to gain a competitive edge in the AI arena. Filed in a California federal court, the lawsuit claims that OpenAI has been engaging in a targeted campaign against xAI employees to extract confidential data linked to the Grok chatbot.