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Elon Musk’s xAI wins federal AI contract as Grok undercuts ChatGPT

The deal provides access to Grok at $0.42 per organization, because of course it’s $0.42.

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Credit: xAI

The U.S. General Services Administration (GSA) has finalized a major agreement with Elon Musk’s xAI, making its Grok artificial intelligence models available to government agencies nationwide. 

Announced on Thursday, the deal provides access to Grok at $0.42 per organization, one of the lowest pricing structures yet for AI services under GSA’s OneGov initiative. The contract runs until March 2027, marking the longest term for a OneGov AI agreement to date.

Low-cost access

The agreement covers both Grok 4 and Grok 4 Fast, xAI’s advanced reasoning models, and includes dedicated engineering support for agencies adopting the tools, the GSA stated in a press release. Federal offices will also be able to pursue upgrade paths to enterprise subscriptions aligned with FedRAMP and Department of Defense security standards.

To make adoption easier, xAI will deliver training programs and tailored enablement services, helping agencies integrate AI models into existing workflows securely. The GSA emphasized that the contract is designed to accelerate responsible AI use while standardizing pricing and avoiding duplicative procurement deals across the government.

Federal Acquisition Service Commissioner Josh Gruenbaum is optimistic about Grok’s use in the federal government. “Widespread access to advanced AI models is essential to building the efficient, accountable government that taxpayers deserve—and to fulfilling President Trump’s promise that America will win the global AI race. We value xAI for partnering with GSA—and dedicating engineers—to accelerate the adoption of Grok to transform government operations,” he stated.

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Expanding AI access

The Grok agreement is part of the broader OneGov Strategy, which was launched earlier this year to modernize federal technology acquisition. Under the initiative, agencies gain access to AI tools from leading providers at negotiated rates, ensuring consistent pricing and simplified procurement. Companies such as OpenAI, Anthropic, Google, and Meta have signed similar deals, but xAI’s contract is currently the longest in duration and lowest in cost. For context, OpenAI is charging government agencies $1 per year for ChatGPT, as noted in a Bloomberg News report.

Elon Musk, for his part, is grateful for the opportunity to use Grok in the federal government. “xAI has the most powerful AI compute and most capable AI models in the world. Thanks to President Trump and his administration, xAI’s frontier AI is now unlocked for every federal agency empowering the U.S. Government to innovate faster and accomplish its mission more effectively than ever before,” he said.

xAI cofounder Ross Nordeen also shared his thoughts about the matter. “‘Grok for Government’ will deliver transformational AI capabilities at $0.42 per agency for 18 months, with a dedicated engineering team ensuring mission success. We will work hand in glove with the entire government to not only deploy AI, but to deeply understand the needs of our government to make America the world leader in advanced use of AI,” he said.

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Elon Musk

Tesla to ramp to 500 Robotaxis in Austin, 1,000 in Bay Area, by end of 2025: Musk

This was, at least, as per recent comments from CEO Elon Musk during his appearance on the All-In podcast.

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Credit: Tesla

Tesla’s Robotaxi pilot is still in its early stages, but it seems like the program in Austin and the Bay Area will see a notable update soon. This was, at least, as per recent comments from CEO Elon Musk during his appearance on the All-In podcast. 

Robotaxi expansion

While discussing Tesla’s Robotaxi ambitions, Elon Musk shared some tidbits about the company’s targets for the autonomous ride-hailing program. As per Musk, Tesla is pushing to increase its Robotaxi fleet size in Austin to 500 units. The Robotaxi fleet in the Bay Area will also be increased to 1,000 units. These expansions are expected to be accomplished by the end of the year.

“We’re scaling up the number of cars to, what happens if you have a thousand cars? Probably we’ll have a thousands cars or more in the Bay Area by the end of this year, probably 500 or more in the greater Austin area,” Musk said in the podcast. 

Considering that there are only two months left in the fourth quarter of 2025, Tesla’s Robotaxi team will likely be extremely busy during the next eight weeks. A successful expansion of the Robotaxi pilot in Austin and the Bay Area will also bode well for the company’s ride-hailing program, which has been pretty conservative as of late.

Musk’s Robotaxi comments

Elon Musk has been pretty clear in the past that Tesla’s FSD and Robotaxi network would play a huge role in the company’s future valuation and potential. Thus, during the third quarter earnings call, Musk highlighted that Tesla will also be transitioning to a system with no safety monitors in Austin by the end of the year. 

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“We are expecting to have no safety drivers in at least large parts of Austin by the end of this year. So within a few months, we expect to have no safety drivers at all in at least parts of Austin. We’re obviously being very cautious about the deployment,” Musk said during the Q3 2025 earnings call.

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Elon Musk

Neuralink’s first patient could receive an upgrade: Elon Musk

Musk stated that Arbaugh could also be the first Neuralink patient to receive an upgrade.

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Credit: Neuralink

Neuralink’s first human patient might be in line for a very interesting development in the future.

Based on recent comments from Elon Musk, Neuralink seems to be considering an “upgrade” for its first human patient, allowing him to perform even more sophisticated tasks using only his mind. 

Elon Musk’s recent comments

Musk’s update came as a reply to an X post that featured some details about the current activities of Noland Arbaugh, the first person in the world to receive a Neuralink implant. Since receiving his implant, Arbaugh has been able to take back his life, and he now games, attends class, and even works as a paid speaker. 

In his response, Musk stated that Arbaugh could also be the first Neuralink patient to receive an upgrade. “Noland might be the first to receive a Neuralink upgrade and/or dual Neuralink implant to further augment his abilities. It won’t be long before a Neuralink recipient can beat most and eventually all humans at fast reaction video games,” Musk wrote in a post on X.

Noland’s recent update

Noland actually provided a quick update about his life with his Neuralink implant, which he fondly named Eve, on X. He noted that his direct involvement with Neuralink has lessened as more participants have joined the company’s human trials. And despite a recent pressure sore setback, he remains optimistic and teased “big news” coming for his two-year update in early 2026.

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Beyond his recovery, Arbaugh stated that Neuralink has made everyday goals achievable again. He is currently studying neuroscience, taking chemistry, biology, and pre-calculus and maintaining good grades, something he said would have been impossible without Neuralink.

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Tesla Cybercab steering wheel dilemma gets final answer from Elon Musk

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Credit: Tesla/YouTube

Tesla Cybercab is the company’s autonomy-geared automobile that will eventually begin the phase-out of human drivers. In recent days, however, there has been speculation regarding the vehicle’s equipment and whether it would be fitted with a typical steering wheel and pedals.

CEO Elon Musk put an end to this discussion, at least for now, as he maintains the vehicle will not have anything that would remotely resemble any possibility of any sort of manual operation.

The problem is, there is a flaw in his logic, and his justification for the reasoning is an opinion. But Musk has a special ability; he has the final say on what goes on at Tesla, and if he does or doesn’t want manual controls in the new vehicle, he’ll get his way.

On the All In Podcast on Friday, Musk gave his final answer to whether the Cybercab would have a steering wheel or pedals by stating it would not when the production units start rolling off lines in Q2 2026.

He provided a further explanation:

“The reality is, people may think they want to drive their car, but the reality is that they don’t. How many times have you been in an Uber or Lyft and said ‘I wish I could take over for the driver, get off my phone, and drive to my destination? 0.0 times.”

Although the units that have been spotted on public roads in recent days are equipped with a steering wheel and pedals, it is because Tesla is testing the vehicle in real-world situations, and manual controls are required for it.

Tesla Cybercab spotted testing on public roads for the first time

Some Tesla fans in the community have said that the car seems more geared toward being suitable for manual operation as opposed to a fully autonomous vehicle primed for driverless ride-hailing.

Earlier this week, Tesla Board Chair Robyn Denholm said that if the company had to put a steering wheel or pedals into the Cybercab, it would.

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