As SpaceX hurtles toward a historic public offering with a staggering $1.75 trillion valuation, a critical component of its growth narrative is facing a harsh reality check. Grok, the artificial intelligence model developed by Elon Musk’s xAI and integrated into the broader Musk corporate ecosystem, is struggling to gain traction within the world’s most lucrative market: the United States federal government.
According to 2025 federal inventory records, out of more than 400 publicly disclosed AI application cases with identified vendors, Grok or xAI was selected for only three. In contrast, OpenAI’s technology, including ChatGPT and Microsoft Copilot, is being utilized in 234 cases. Even Google’s Gemini and Anthropic’s Claude have secured significantly more contracts, with 33 and 26 cases respectively, despite the latter having faced previous political scrutiny.
The qualitative gap is as concerning as the quantitative one. While agencies like DARPA are leveraging Google’s Gemini for advanced engineering analysis and coding, Grok is largely relegated to low-level administrative duties. Current records show Grok is primarily used for drafting internal documents and generating social media content for the Office of Personnel Management and the Department of Health and Human Services.
This lack of institutional trust suggests a fundamental mismatch between Grok’s "rebel" branding and the rigorous safety requirements of federal agencies. Industry analysts point out that without the stamp of approval from the U.S. government, corporate buyers are likely to remain wary. Data from network monitoring firm Netskope already indicates a decline in enterprise usage, with Grok engagement dropping from five to just two per thousand users.
For SpaceX, the stakes of this AI stagnation are immense. The company’s internal projections suggest a $26.5 trillion market opportunity for its AI ventures, fueled by over $10 billion in annual investment. However, if Grok cannot compete with the reliability and utility of OpenAI or Anthropic, the ambitious valuation floor of $1.75 trillion may actually represent a precarious ceiling rather than a foundation for future growth.