The General Services Administration (GSA) announced this week that it has entered into a partnership with xAI, granting federal agencies access to the company’s latest generative AI tools, Grok 4 and Grok 4 Fast, under a contract valid through March 2027. While the arrangement mirrors similar deals struck with OpenAI and Anthropic, the political context surrounding the xAI agreement sets it apart.
A deal that signals more than just technology
The federal government’s AI strategy has accelerated over the past few months, with agencies rushing to test, adopt and integrate large language models into their operations. In July, xAI was among several companies awarded Pentagon contracts, but this new GSA partnership is more comprehensive and more symbolic.
xAI’s inclusion not only boosts the company’s credibility in a hotly contested AI landscape, it also represents a political win for Musk, who has been angling to position his AI offerings as faster, more open and less ideologically “woke” than competitors. The Grok chatbot, known for its edgier and more contrarian tone, is uniquely aligned with many in the conservative base, a fact not lost on Trump or his strategists.
The timing of the xAI deal, just days after Musk and Trump were seen conversing at the Kirk memorial service, has fueled speculation about a broader détente.
Was the Kirk Memorial a quiet reset?
Charlie Kirk’s memorial service became the backdrop for a potential political reconciliation. Trump and Musk were seen seated next to each other and chatting, the first time they had appeared publicly together since their relationship soured in May when Musk resigned from his controversial post as head of the now-defunct Department of Government Efficiency (DOGE). Musk had publicly lambasted Trump’s flagship legislation, the “One Big Beautiful Bill”, accusing it of bloating the federal deficit and undoing the work of his DOGE team.According to lip-reading analysis reported by the Daily Mail, the exchange between Musk and Trump was cordial, even warm. Trump reportedly began with a casual, “How are you doing?” before broaching the topic of reconciliation: “So Elon, I’ve heard you wanted to chat. Let’s try and work out how to get back on track.” Musk, by most accounts, appeared receptive. For a relationship that had turned bitter, complete with social media jabs, accusations and Musk even alluding to Trump’s alleged ties to the Epstein scandal, this was a notable shift in tone.
The politics of pragmatism
Despite their personal grievances, both men have strategic reasons to find common ground. For Musk, federal government support is critical. xAI is competing in a crowded field where OpenAI (with its partnership with Microsoft) and Anthropic (backed by Amazon and Google) have deep pockets and institutional backing. Securing federal contracts, even at nominal fees, gives xAI both validation and access to real-world use cases that can accelerate its technology and its reputation. Moreover, Musk’s ownership of X, along with his fanbase among the libertarian and MAGA-aligned right, makes him a power broker in conservative digital culture. Aligning with Trump, at least on key issues like AI adoption, could prove mutually beneficial.
For Trump, reconciling with Musk offers a tech-savvy credibility boost and a potential media ally. Trump’s base, which overlaps heavily with Musk’s social media audience, is unlikely to miss the signal.
Despite the warm gestures and the business deal, the Trump-Musk relationship is far from fully repaired. A White House official told the New York Post that the xAI agreement had been in the works for weeks and that its approval should not be conflated with personal politics. “We shouldn’t expect Elon in the Oval any time soon,” the official cautioned. Indeed, the wounds from their earlier fallout are still fresh. Musk’s departure from DOGE was abrupt and acrimonious. His subsequent public criticism of Trump’s fiscal policy struck a nerve. Musk’s exit was framed as a principled stand against waste and inefficiency, a move that endeared him to fiscal conservatives but created political discomfort for Trump.
What’s more, Musk’s libertarian-leaning stance on free speech and limited government sometimes clashes with the more authoritarian impulses in Trump’s political orbit. While Musk commands influence, especially on X, he also resists being politically boxed in, a trait that makes him both an asset and a liability to political allies.
The federal xAI deal may not mark a full-fledged political alliance, but it certainly reflects a strategic realignment. Trump and Musk, two of the most polarising and influential figures in modern American life, seem to recognise that collaboration, even if cautious and transactional, can serve their mutual interests. Their public interaction at Charlie Kirk’s memorial, followed by a major federal contract, suggests a pragmatic pivot more than an emotional reconciliation. their relationship can evolve from a temporary thaw into a partnership again, even if volatile. In the meantime, the frost is melting, and both sides are testing the waters.
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