Grok Barely Used in Federal Government, Undercutting SpaceX's AI Ambitions
SpaceX's Grok chatbot has failed to gain traction with the US government, according to a Reuters review of federal AI inventory records. Of more than 400 publicly identified AI deployments across federal agencies, only three involve Grok. OpenAI's ChatGPT and related tools appear in 234 cases.
The weak adoption matters because SpaceX is pursuing an initial public offering valued at $1.75 trillion, with xAI positioned as a major growth engine. The company has pitched AI for Government work as a multi-trillion-dollar opportunity.
The Numbers Tell the Story
The 2025 consolidated inventory records, compiled by the Office of Management and Budget, show the gap clearly. Google's Gemini appears in 33 use cases. Anthropic's Claude shows up 26 times. Grok appears in three.
At the Office of Personnel Management and the Department of Health and Human Services, Grok was deployed for basic tasks: drafting documents and social media posts. A spokesperson for OPM said Microsoft Copilot is the AI tool most commonly used at the agency.
In the Pentagon's unclassified AI hub, Grok was added in May. But a Pentagon source said many staffers prefer competitors. At the Defense Advanced Research Projects Agency, Gemini is used for engineering analysis and Claude for coding and writing. Grok "is just not the best model out there," the source said.
What Low Adoption Signals
The government's hesitation raises questions about Grok's security and capability. Vineet Jain, CEO of enterprise software maker Egnyte, said weak federal adoption is a "canary in the coal mine" for corporate buyers. "Without government validation, the $1.75 trillion valuation looks less like a floor and more like a high ceiling," Jain said.
xAI is pursuing FedRAMP High Authorization, a certification for sensitive government work. The company lost a bid to build a Grok product for the Department of Veterans Affairs because the chatbot did not meet the department's requirements.
Corporate Weakness Mirrors Government Struggles
Grok's government struggles reflect broader market weakness. Netskope, which tracks how corporate customers use AI models, found that Grok usage fell to 2 out of every 1,000 users, down from a peak of 5 per 1,000. Employees who used Grok spent less than half the time on it compared to ChatGPT users.
Netskope executive Ray Canzanese said the data shows Grok "is just not going to enter the mainstream for corporate America."
The Strategy Behind Free Access
Grok has been available to federal agencies for eight months at 42 cents per agency-essentially free. This pricing mirrors competitors' approach: lock in users early with low-cost access, then raise prices later.
Valerie Wirtschafter, a researcher at the Brookings Institution who studies federal AI adoption, said the goal is straightforward. "The goal is to encourage adoption so that federal employees eventually can't imagine doing their jobs without generative AI," she said.
That strategy has not worked for Grok.
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