Elon Musk’s AI startup xAI has announced a nearly $200 million contract with the US Department of Defense for developing AI tools for the military.

The news comes a week after xAI’s foul-mouthed Grok chatbot had a full-blown Nazi meltdown, referring to itself as “MechaHitler” and making outrageously bigoted claims about Black and Jewish people.

In a wordy statement that was thin on details, the DoD’s chief digital and AI officer, Doug Matty, lauded the partnership as an important step forward for the US military.

“Leveraging commercially available solutions into an integrated capabilities approach will accelerate the use of advanced AI as part of our joint mission-essential tasks in our warfighting domain as well as intelligence, business and enterprise information systems,” Matty said.

The announcement highlights how cozy Musk’s relationship with the government has become, despite his major falling out with president Donald Trump. In May, Musk’s so-called Department of Government Efficiency was heavily criticized for pushing the use of its Grok chatbot at the Department of Homeland Security without the required sign-offs, yet another example of the billionaire’s glaring conflicts of interest.

Its massive DoD contract could xAI a much-needed influx of cash. The startup has been burning through an astonishing $1 billion per month, forcing a seemingly desperate Musk to siphon off funds from his other businesses to keep it afloat.

Apart from the DoD deal, xAI also announced a “Grok for Government” feature, designed to capture the Trump administration’s considerable appetite for adopting AI.

It also conveniently aligns with the administration’s “anti-woke” agenda. Musk has been trying to push Grok to allegedly be “maximally truth seeking” in a purported effort to root out its “woke” tendencies, such as pointing out accurate reporting by trustworthy news sources.

Instead, Musk has pushed the chatbot to echo his personal, right-wing extremist beliefs to a near-comical degree. Over the weekend, it emerged that Grok was searching Twitter and the web for Musk’s personal views before making up its mind.

In other words, the US military is spending hundreds of millions of dollars on a chatbot that isn’t just happily furthering unhinged conspiracy theories; it’s started to act like Musk’s own AI shadow, making it a highly questionable choice for the Department of Defense.

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