thenextweb.com: https://thenextweb.com/news/grok-flat-washington-spacex-ipo

Speaker: —
Subject: W000817
Source: GDELT news · original
Published: Thursday, May 21, 2026

Public Citizen has petitioned the OMB twice to suspend federal use of Grok over accuracy and bias concerns, citing prior outputs the group describes as racist, antisemitic and factually incorrect. Senator Elizabeth Warren has separately pressed Defense Secretary Pete Hegseth over the Department of Defense granting Grok classified-system access despite NSA and GSA concerns.

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Grok’s federal stall is undercutting SpaceX’s IPO growth story Skip to content Toggle Navigation News Events TNW Conference June 19 & 20, 2025 All events Newsletters Partner with us Jobs Contact News Latest Deep tech Sustainability Ecosystems Data and security Fintech and ecommerce Future of work Conference media hub More Startups and technology Investors and funding Government and policy Corporates and innovation Podcast Insider Grok’s federal stall is undercutting SpaceX’s IPO growth story May 21, 2026 - 10:28 am Downloads have fallen from 20m in January to 8.3m in April, paid conversion is a fifth of ChatGPT’s, the $0.42-per-agency GSA deal is now stalled, and SpaceX has rented out the Memphis Colossus 1 cluster to Anthropic for $1.25bn a month. SpaceX’s S-1 filed on Tuesday rests on an AI-revenue line Grok is no longer obviously delivering. Grok is not selling in Washington, and on Thursday it became Wall Street’s problem. Reuters reported that Elon Musk’s xAI chatbot has failed to convert its September 2025 GSA OneGov agreement into the kind of federal-agency adoption that competitors OpenAI and Anthropic are now operationalising. Only three days after SpaceX filed an S-1 prospectus in which the company’s AI-revenue line is positioned as the growth engine underwriting what would be the largest IPO in history. TNW City Coworking space - Where your best work happens A workspace designed for growth, collaboration, and endless networking opportunities in the heart of tech. Book a tour now The consumer-side numbers are sharper still. Grok downloads falling to about 8.3 million in April from a January high above 20 million. Paid conversion, on the Reuters reporting, sits at roughly 0.174% of surveyed US consumers and workers in Q2 2026, against more than 6% who pay for ChatGPT. The growth curve that powered Grok’s 2025 IPO-narrative contribution has reversed across the past four months. The GSA OneGov agreement Musk signed in September is the part Washington-watchers have been tracking most closely. The $0.42-per-organisation 18-month deal, announced by the GSA in late September 2025 , was designed to deliver Grok 4 and Grok 4 Fast to every federal agency at a token price. Public Citizen has petitioned the OMB twice to suspend federal use of Grok over accuracy and bias concerns, citing prior outputs the group describes as racist, antisemitic and factually incorrect. Senator Elizabeth Warren has separately pressed Defense Secretary Pete Hegseth over the Department of Defense granting Grok classified-system access despite NSA and GSA concerns. The compute-side trade is the bit that gives the story its commercial sharpness. SpaceX has rented out the Memphis Colossus 1 data centre, the 220,000-Nvidia-GPU, 300-megawatt facility that was Grok’s primary training environment, to Anthropic for $1.25bn per month through May 2029. The implication is mechanically straightforward: with Grok’s consumer demand falling, xAI has more compute than it needs, and sel

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