Reuters: Grok falls flat in Washington, undercutting SpaceX's AI growth story
OMB records show only three federal AI use cases for Grok, compared with 234 for OpenAI-based tools, undercutting xAI’s government sales pitch.
- On May 21, Reuters reported that xAI's Grok chatbot appears in only three of more than 400 publicly identified federal AI use cases, failing to gain significant traction with U.S. government agencies.
- This federal weakness mirrors broader corporate struggles, as web traffic monitoring firm Netskope reported Grok enterprise usage fell to 2 per 1,000 users, down from a peak of 5 per 1,000 users.
- By contrast, federal inventory records show 234 examples of OpenAI-based models, while Anthropic's Claude and Alphabet's Gemini account for 59 use cases; Grok has been available to agencies for eight months at 42 cents per agency.
- Low adoption rates raise questions about whether Grok can capture market share to justify SpaceX's $1.75 trillion IPO valuation, which depends on a projected $26.5 trillion AI market opportunity.
- While xAI holds a $200 million Pentagon deal, broader inventory data excludes this classified usage, and both xAI and the Office of Management and Budget declined to comment on the figures.
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As Grok flounders, SpaceX bets future on beating Big Tech at AI
Elon Musk’s SpaceX has highlighted AI as the tentpole of the company’s future, projecting a multi-trillion-dollar market opportunity that rivals the total value of all US economic activity. But the company must first win over customers who generally favor AI models from competitors such as OpenAI and Anthropic. SpaceX described its traditional space launch and satellite business as playing a supporting role to its fledgling AI business in financ…
U.S. federal agency records in 2025 show more than 400 publicly identified examples of government use of AI that cite a specific supplier, with only three involving xAI or Grok
Grok falls flat in Washington, undercutting SpaceX's AI growth story
Startup xAI's Grok chatbot has been a flop with one of the world’s largest customers – the U.S. government, according to seven federal employees, three contracting experts and a Reuters review of government AI inventory documents.
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