ENTERPRISE AI

Musk, xAI make federal government comeback

Elon Musk may once again be looking to curry the favor of the Trump administration. 

On Thursday, Musk’s xAI and the General Services Administration announced a partnership for the company to offer its Grok AI reasoning models and training to federal agencies for 42 cents per organization for 18 months.

The deal could be a sign that Musk and President Donald Trump are warming up to one another again after their relationship frayed earlier this year due to clashes over Trump's “Big, Beautiful Bill,” leading to public spats played out on Truth Social and X.  

However, Musk’s xAI is just one in a long line of tech firms looking to get in with federal agencies.

• On Monday, Meta announced a partnership with the federal government to offer its Llama open-source models across agencies. 

• Microsoft offered Copilot to some U.S. agencies free of charge and threw in $20 million to support adoption of the tech in early September. 

• In early August, OpenAI announced that it would offer federal agencies access to ChatGPT for $1 per year per agency. Later that month, Google launched “Gemini for Government,” offering a suite of AI and cloud services at less than 50 cents per agency through 2026. 

• Amazon Web Services and Oracle each offered steep discounts on their cloud services offering, aiming to speed up cloud migration and AI adoption. ServiceNow and Box similarly offered their services for cheap.

Josh Gruenbaum, federal acquisition service commissioner, told Reuters that this deal is “not about currying favor.” Still, these partnerships allow the federal government to create a “level playing field” among any tech firm looking to gain a foothold while AI adoption is still nascent, said Justin Eggstaff, managing partner for the U.S. federal government at Info-Tech Research Group. “They're trying to allow everybody to come in and play.” 

But the stakes may be high for these tech firms, Eggstaff said. Whichever company can get in early, find its footing and scale adoption is the one that becomes “the standard,” he said, potentially opening the door for lucrative government work down the line. “Switching costs become so high that it's easier for the federal government to maintain that.”

Legacy providers like Microsoft and AWS have longstanding relationships with government agencies, but that might not be enough to give them an edge. Given the regulatory restrictions on data in government work, the winner will likely be the company that’s flexible enough to adapt to those compliance requirements while giving these agencies room to play. Ease of use and seamless integration into existing operations could also play a role in deciding the frontrunner, hence why several of these GSA deals include training programs and investments to make adoption frictionless.

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GENERATIVE AI

Spotify goes after AI-generated content

Spotify wants to sift out the real from the fake.

The streaming company announced changes on Thursday that seek to address the surge of AI-generated music on its platform, as generative models make it easier than ever to create content. 

Spotify’s payouts to artists have skyrocketed from $1 billion in 2014 to $10 billion in 2024, the company said in its press release. That payout, in turn, has attracted “bad actors.” 

“In the past 12 months alone, a period marked by the explosion of generative AI tools, we’ve removed over 75 million spammy tracks from Spotify,” the company said.

Spotify is implementing three changes: 

• It debuted a new impersonation policy to clarify rules around AI voice clones and impersonation, giving artists “stronger protections and clearer recourse.” 

• This fall, it’s releasing a music spam filter to identify “slop,” such as mass uploads, duplicates or artificially short tracks of just over 30 seconds, “as AI tools make it simpler for anyone to generate large volumes of music,” and dilute the royalty pool.

• In partnership with DDEX, a standard-setting organization for the music business, it’s developing a new metadata standard for disclosing when AI is used in the song creation process. 

Despite rumors that Spotify itself is creating these AI-generated tracks as a scheme to avoid paying artists royalties for their music, Sam Duboff, head of marketing and policy, told The Verge that there is “no truth to the conspiracy theories,” noting that all music on Spotify is licensed by third parties. 

As legal battles between publishers and major model developers rage on, changes like these could indicate that Spotify is reading the tea leaves, implementing protections before it faces any heat.

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AUTOMATION

Coast Guard lands $350M for robotics, autonomy

The U.S. Coast Guard has landed a $350 million investment to develop robotics and autonomous systems, funded through the government’s newly enacted One Big Beautiful Bill Act (OBBBA).

The announcement marks the first visible deployment of OBBBA funds in the robotics and autonomy space – providing a potential preview of what’s to come in other industries.

As part of the investment, the Coast Guard plans to channel an initial $11 million for immediate upgrades across critical systems this year. These include:

• $4.8 million for 16 VideoRay Defender remotely operated vehicles

• $2 million for six Qinetiq Squad Packable Utility Robots and 12 mini-SPURs

• $4.3 million for 125 SkyDio X10D short-range drones

The tools will replace the Coast Guard’s outmoded fleets, supporting environmental monitoring, disaster response and search and rescue use cases.

Beyond the Coast Guard

The OBBBA, which officially became law on July 4, includes grand plans for leveraging AI and autonomy to bolster U.S. industries, including defense, security and maritime. 

While specific funding projects have not yet been revealed, proposed investments include:

• $450 million for AI and autonomy in naval shipbuilding

• $4.6 billion for unmanned surface vessels and underwater vehicle production

• $188 million for the development and testing of maritime robotic autonomous systems

• $4.5 billion for AI and surveillance in the U.S. Customs & Border Protection

• $6.1 billion for autonomous surveillance, towers, drones and sensor systems along U.S. border regions

• $500 million to scale AI efforts in the Department of Defense 

• $1.2 billion for upgraded rapid response air and marine platforms

The OBBBA’s exact structure is still emerging, but the latest announcement shows the White House is already making good on its promise to champion AI, with the Coast Guard investment the first step in this journey.

LINKS

• $1.5B Anthropic settlement gets preliminary OK

• Trump eyes tariffs on robotics, machinery, medical imports

• After cloud shift, SAP CEO eyes new challenge

• Microsoft terminates Israeli military’s access for terms-of-service breach

• Meta poaches another former OpenAI employee

• Moffett calls Alphabet most valuable AI company

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