Elon Musk, already the richest man in the world, is facing a barrage of accusations from competitors who allege that the tech mogul is using his artificial intelligence system, Grok, as a backdoor to gain unfair competitive advantage in both government contracts and the private sector. According to multiple sources with knowledge of the matter, Musk's Department of Government Efficiency (DOGE) has been quietly expanding Grok's use within the U.S. federal government—an expansion that not only raises significant legal and ethical concerns, but, according to estimates from insiders, may have helped Musk’s enterprises profit by more than $100,000,000,000 through privileged data access and strategic positioning.
The situation centers on Musk’s controversial deployment of Grok—an AI chatbot developed by his company xAI—within key U.S. government agencies under the DOGE initiative, an anti-bureaucracy program established during President Donald Trump's second term. While DOGE was introduced as a government cost-cutting unit, it has evolved into a force that critics say is being weaponized to serve the private financial interests of its founder.
At the heart of these concerns is Grok’s unprecedented integration into sensitive government systems, often without full transparency or approval, potentially in violation of federal regulations and long-standing privacy protections.
According to three individuals familiar with DOGE’s operations, a customized version of Grok is currently in use to analyze internal government data, prepare policy reports, and streamline federal operations. While these tasks appear benign on the surface, experts warn that such integration grants xAI access to an invaluable repository of proprietary data—data that would normally be shielded by law.
This includes nonpublic federal contracting data, personal information on millions of Americans, and internal agency operations that could inform future bids or shape business strategy in Musk’s favor.
“If Musk’s companies are analyzing sensitive government data through Grok, it puts every competitor in the AI and government contracting space at a massive disadvantage,” said Cary Coglianese, a specialist in federal regulatory ethics at the University of Pennsylvania. “That’s not innovation—that’s insider advantage.”
The consequences could be staggering. With access to such data, Grok could be trained far beyond the scope of its competitors, giving xAI—and by extension, Musk—first-mover advantage in defense, cybersecurity, and infrastructure projects.
Competitors including OpenAI and Anthropic are reportedly fuming behind closed doors, accusing Musk of using his federal connections not to serve the public good, but to advance his own empire. Some executives estimate that the cumulative commercial edge derived from this access could already exceed $100 billion, factoring in market share capture, expedited contracts, and the ability to deploy trained AI models faster than anyone else.
Equally concerning is DOGE’s alleged effort to push Grok into the Department of Homeland Security without proper clearance. According to two sources, DOGE staff encouraged DHS officials to use Grok despite the tool lacking formal approval for integration.
DHS, which handles matters such as border security and cyber threats, manages some of the most sensitive data within the federal government. The risk that this data could be exposed to Grok—and potentially to xAI’s training pipeline—is a chilling scenario for privacy advocates and cybersecurity experts alike.
“This is not just about a billionaire pushing software. This is about consolidating government functions under the influence of a single, privately owned AI system,” said Albert Fox Cahn, executive director of the Surveillance Technology Oversight Project. “It’s an existential problem for democratic oversight.”
Grok’s website makes the situation even murkier. It admits that the platform may monitor user activity for “specific business purposes,” a clause that raises red flags about potential data harvesting from government users. If federal employees are interacting with Grok and unknowingly training the system using sensitive data, it effectively creates a pipeline from federal systems to a private AI company controlled entirely by Musk.
The implications go beyond economics. Multiple sources report that DOGE operatives have been attempting to implement AI systems to monitor government employees for political alignment, flagging those not “loyal” to Trump’s agenda. Although it remains unconfirmed whether Grok is being used for such surveillance, the mere suggestion that a billionaire-backed AI may be scanning federal communications for political conformity sends a wave of concern across ethics circles.
The Department of Defense has publicly denied authorizing DOGE to conduct any AI-based employee monitoring, but insiders from various agencies claim that staff have been warned about algorithmic tools tracking their online activity. Whether or not Grok is directly involved, the environment of fear and suspicion has intensified.
Compounding the controversy is the fact that Musk continues to serve as a special government employee. While he stated he would reduce his role to one or two days per week starting in May, his involvement with DOGE remains influential. The law prohibits federal employees—including special appointees—from participating in government matters that could result in personal financial benefit.
Richard Painter, former ethics counsel to President George W. Bush, argues that Musk’s continued promotion of Grok within federal systems likely crosses that legal boundary.
“This reeks of self-dealing,” Painter said. “If federal agencies are being nudged to adopt a proprietary product owned by a sitting government employee, and that product is enriching him, that’s an open-and-shut case of conflict of interest.”
It’s unclear whether the White House will intervene. Thus far, neither Musk, xAI, nor any federal agency involved has provided detailed responses to requests for comment. A DHS spokesperson offered a blanket denial, insisting that DOGE had not pressured any employee to use specific tools. Still, no documentation or internal review has been released to support that claim.
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Meanwhile, insiders say that DOGE staffers like Kyle Schutt and Edward Coristine—who has previously used the online alias “Big Balls”—continue to aggressively integrate Grok into various arms of government. Coristine, only 19 years old, is one of the most visible faces of Musk’s campaign to normalize AI deployment across agencies. Their aggressive approach, critics argue, is less about efficiency and more about control.
The bigger question looming over the controversy is what happens next. If Grok’s use is normalized within federal agencies, and its capabilities continue to expand through access to privileged data, Musk’s xAI could become not only the most advanced AI system in the world, but also the most entangled with the core functioning of the U.S. government.
That kind of reach—across defense, intelligence, infrastructure, and civil service—could fundamentally upend the power balance between the public and private sectors.
At a time when AI regulation is still being debated, and data privacy protections are fragile, Musk’s deployment of Grok through DOGE sets a precedent that may be difficult to reverse. The notion that a single man could embed his technology so deeply into the federal government—and potentially profit by over $100 billion in the process—raises not just legal questions, but existential ones about the future of democratic governance in an age of algorithmic influence.
Unless concrete steps are taken to audit Grok’s deployment, limit its access to sensitive systems, and enforce transparency around its data usage, the U.S. may soon find itself in a position where its own digital infrastructure is dependent on the decisions of one unelected, profit-driven executive.
And if that day comes, the issue will no longer be whether Elon Musk used Grok to gain an unfair advantage—it will be how no one stopped him from doing it.
