SpaceX’s planned IPO is shaping up to be one of the most colossal events in market history.
Its valuation, pegged at $1.75 trillion, rests in part on a promise: Grok, the AI chatbot integrated into SpaceX since February, would be called upon to win over major organizations, starting with the U.S. federal agencies.
Sadly, according to a Reuters investigation, the reality is quite different.
The 2025 consolidated inventories of federal agencies list more than 400 public uses of AI, naming a specific provider.
Among them, only three reference xAI or Grok. The contrast with the competition is striking: 234 cases involve technologies based on OpenAI’s models, including ChatGPT, Codex and Microsoft Copilot; 33 concern Gemini or other Alphabet products; and 26 concern Claude, the chatbot from Anthropic.
Yet the conditions seemed ripe for Grok to assert itself. The chatbot has been available to federal agencies for eight months, at a symbolic price of 42 cents per agency. Even if its direct competitors charge roughly the same rate.
A Model Deemed Insufficient at the Pentagon
The disappointment is not confined to civilian agencies. Within the Pentagon itself, which had nonetheless signed a $200 million contract with xAI, enthusiasm is measured.
At DARPA, the Pentagon’s research and development agency, Google Gemini is used for engineering analysis, while Anthropic’s Claude is preferred for coding, drafting and research. Claude or Gemini are favored in the most advanced engineering circles, notably because Grok “simply isn’t the best model available,” according to an internal source cited by Reuters.
When the announcement of Grok’s integration into the Defense Department’s unclassified platform, Genai.mil, was made, many personnel preferred competing tools. More recently, xAI faced a rejection in a bid to develop a Grok-powered product for the Department of Veterans Affairs. The chatbot would not have met the department’s requirements.
Governmental reservations about Grok are not an isolated case. According to Netskope, which tracks how thousands of companies connect to AI models, Grok has “failed to gain significant traction” in enterprise environments.
It remains to be seen whether this adoption shortfall will pose a risk to investors’ confidence in SpaceX’s growth prospects and impact its upcoming IPO.
