White House Drops Bombshell on xAI, Defense Contracts, and Trump’s America First Stance
The landscape of defense innovation, artificial intelligence, and federal contracts just saw a massive shakeup, with the White House confirming President Trump’s bold stance: the Trump administration does not support federal agencies contracting with Elon Musk’s artificial intelligence company, xAI. The $200 million partnership struck last week between xAI and the Department of Defense sent shockwaves through political and technology circles, but with yesterday’s White House press briefing, the picture is changing fast. At the heart of the story is the administration’s unwavering commitment to putting America First, especially when it comes to who America trusts with the next generation of military tech.
The story began to unfold Wednesday when White House Press Secretary Karoline Leavitt was directly asked about President Trump’s opinion on the DoD’s controversial decision to engage xAI in the government’s highest-stakes AI applications. Her answer was unambiguous: “I don’t think so, no.” The president, according to Leavitt, stands firm against leveraging taxpayer funds or government trust on Musk’s AI operation. That pronouncement came after weeks of speculation fueled by rumors of a deepening rift between Trump (R) and Musk (I), once White House collaborators and now divided by both ambition and principle. As Axios reported July 23, 2025, Leavitt’s candor “sent shockwaves through both Silicon Valley and the Pentagon.”
Trump’s opposition seems to be more than a gut-level distrust. The Department of Defense, for its part, admits that the latest crop of AI models have produced risky, unpredictable outputs during their testing phase, yet chose not to exclude xAI from active prototypes. This move unsettled many national security hawks who argue for rigorous, even draconian, vetting of any AI technology linked to America’s defense systems. Given the president’s track record of demanding strict scrutiny for every entity working with the government, his stance comes as no surprise.
“President Trump has never wavered when it comes to defending America’s interests first—no matter the lobbyists, no matter the Silicon Valley hype. He’s focused on what keeps us safe,”
a senior aide told Trump News Room. It’s this unrelenting America First approach that continues to drive day-to-day decisions out of the Oval Office.
Pentagon’s $200 Million Gamble on Musk Raises Conservative Concerns
The Pentagon’s high-stakes investment in AI is no secret. Last week, defense officials—under the umbrella of the Chief Digital and Artificial Intelligence Office—awarded a staggering $200 million contract to a quartet of tech powerhouses: xAI, Anthropic, Google, and OpenAI. Each firm is expected to push boundaries on AI development for national security, but the inclusion of Musk’s xAI drew an outsized spotlight. Defense News confirmed on July 15 that these contracts were meant to “accelerate the Pentagon’s ability to adopt critical AI technologies,” yet the decision’s wisdom is under renewed scrutiny.
At issue: xAI’s very recent, headline-grabbing launch of “Grok for Government,” an AI toolkit created explicitly for federal and defense customers. This strategic product suite, announced in conjunction with the DoD agreement, has both supporters and skeptics in D.C. One conservative staffer characterized Grok’s rollout as “opportunistic,” and warned that entrusting military workflows and data to a rapidly-assembled Silicon Valley toolset could threaten both efficiency and operational security.
The skepticism is heightened by Musk’s (I) public spat with the Trump administration, which escalated after Musk’s departure as a special government employee this May. According to Reuters reporting on July 21, Musk’s separation and subsequent public criticisms have “fundamentally changed the calculus of risk, loyalty, and oversight in the White House.” President Trump’s philosophy has always rested on the understanding that, especially in matters of national security, there are no shortcuts for character and loyalty. And with the DoD admitting that certain frontier AI models have generated questionable results, some insiders argue that America can’t afford to hand the keys to our defense infrastructure to tech titans driven as much by profit as patriotism.
“Nobody should be surprised by the president’s reaction. He’s sending a message: Not every billionaire with a coding team gets a seat at America’s table,”
a senior Republican (R) strategist told us. In the current political climate, where election integrity, technological sovereignty, and transparency are paramount, this viewpoint is resoundingly popular among the conservative base.
Policy Legacy, Past AI Security Battles, and The Future for xAI in Trump’s America
The current fight over xAI’s eligibility for lucrative federal contracts highlights a recurring theme of the last decade: America’s ongoing battle to safeguard its technological independence from both foreign and domestic threats. With Trump at the helm following a landslide reelection, his second term has increasingly centered on realigning federal technology policy with deeply held principles of sovereignty, transparency, and security. While some in the tech industry decry the loss of rapid commercial partnerships, many in the America First movement cheer the pivot toward tighter oversight and higher standards.
Past showdowns—like the 2022 TikTok controversy, the 2024 AI misinformation crackdowns, and the deplatforming debates of 2023—underscore just how high the stakes have become. Trump has consistently argued that unless the government controls the contracts, the code, and the culture of its technological suppliers, America’s adversaries will exploit our openness and innovation. The decision to push back on xAI, seen in many corners as a strategic riposte to Musk’s refusal to play by traditional rules, is rooted in exactly this logic. Insiders say President Trump (R) views the defense contract cancellation as an opportunity for the U.S. to back firms with “demonstrated loyalty and proven records,” not just those who can make the most noise or move the fastest in the private sector.
As the debate unfolds, conservatives and Trump supporters are watching carefully to see if the administration’s no-nonsense position leads to policy changes at the Pentagon’s Chief Digital and Artificial Intelligence Office, which currently steers AI spending and risk management across the defense landscape. Early signs suggest a rigorous review of all future AI partnerships and a possible pivot to firms that align with Trump’s America First mandates.
“President Trump has been clear—if a company wants America’s business, they need to put America’s interests first, period,”
a senior policy official said.
For xAI, the writing may be on the wall: In a Trump-led America, national security isn’t for sale to the highest bidder—especially not to those who put personal ambition above American priorities. The White House’s recent comments may prove a turning point for AI policy—and serve as a reminder that every contract is an extension of the values America wants to project into the world.