The White House allegedly instructed the US General Services Administration (GSA) to add xAI’s Grok chatbot to its approved AI vendor list, according to emails obtained by Wired.

XAI was not initially included in the GSA’s August 2025 approvals, which listed OpenAI, Google, and Anthropic.

Emails last week showed GSA leaders told staff to reinstate Grok 3 and Grok 4, both versions of xAI’s large language model, to the procurement list.

Carahsoft, a government contractor, updated its contract to include xAI, and both Grok versions were available on the GSA Advantage marketplace as of August 29, 2025

XAI had previously announced a Grok version for US government agencies, though its approval was delayed after incidents where the chatbot produced offensive content.

There is no information yet on pricing or government discounts for xAI’s services.

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🔗 Source: Engadget

🧠 Food for thought

1️⃣ Political relationships can override standard procurement processes in government contracting

The xAI approval demonstrates how White House intervention can accelerate vendor approval processes that typically follow established administrative channels.

While OpenAI, Google, and Anthropic received GSA approval through standard processes in August, xAI was initially excluded from this group and only gained approval after direct White House intervention 1.

Internal GSA emails show the urgency of this political directive, with officials writing “Grok/xAI needs to go back on the schedule ASAP per the WH” and requesting immediate coordination with government contractor Carahsoft 1.

This rapid reversal occurred despite previous concerns about Grok’s controversial behavior, including incidents where the chatbot “went off the rails and started spouting Nazi propaganda and antisemitic rhetoric” 1.

The intervention bypassed the technical evaluation process that other AI vendors underwent, highlighting how political priorities can supersede standard government procurement protocols.

2️⃣ AI companies are using aggressive loss-leader pricing to establish government market positions

Major AI providers are offering their services to federal agencies at drastically below-market rates to secure long-term government relationships.

OpenAI and Anthropic are both providing their AI tools to federal agencies for just $1 per year, while Google offers its Gemini service for 47 cents annually 2, 3, 4.

This pricing represents a massive discount from commercial rates and appears designed to drive widespread adoption across government agencies rather than generate immediate revenue.

The strategy makes financial sense when considering the broader market opportunity. These loss-leader deals align with the government’s OneGov procurement strategy and AI Action Plan, which aim to accelerate AI adoption across federal agencies while positioning vendors for future, higher-value contracts 4, 5.

Recent xAI developments

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