PayPal Mafia, which has taken over the U.S. government, aims to replace civil servants with AI

Korea Economic Daily

Summary

The government-targeted AI model released by xAI is being regarded as a means to replace U.S. federal civil servants following workforce reductions.
It was announced that U.S. government agencies will be able to purchase xAI products via the General Services Administration (GSA).
Concerns are rising over data management and personal information protection as other AI companies such as Palantir expand their roles within the government.

xAI releases AI model for government agencies

Filling positions reduced by the Department of Government Efficiency

Elon Musk's artificial intelligence (AI) startup xAI launched an AI model for government agencies on the 14th (local time). Analysts suggest that this move is intended to replace the large number of U.S. federal civil servants who have been laid off through the Department of Government Efficiency (DOGE) with AI.

The 'Grok for Government' announced by xAI is a government AI service based on advanced AI models, including Grok 4, which was unveiled by xAI on the 9th. xAI explained that the service provides a range of functionalities—including routine tasks such as report summarization, as well as national security, healthcare, and basic science. In addition, xAI announced that U.S. government agencies can now purchase its products through the General Services Administration (GSA). The GSA, which oversees federal procurement, said, "Various agencies are reviewing multiple AI solutions, and we welcome all American companies and models that meet our requirements."

Musk, who has led DOGE until recently, has repeatedly advocated that "AI should replace civil servants." According to Reuters, from December last year to April this year, when DOGE was in operation, about 260,000 federal civil servants left the government through layoffs, resignations, or early retirements. Foreign media outlets note that the launch of xAI's government AI model signals Musk's plan to fill the vacancies with AI is materializing.

Peter Thiel, another member of the so-called 'PayPal Mafia' along with Musk, is also expanding the role of his AI company Palantir within the Trump administration. After signing its first large-scale contract with the U.S. Army—worth $800 million (about ₩1.1 trillion) in 2019, during Trump's first term—Palantir has increased its collaboration with the defense and intelligence agencies. Recently, agencies including law enforcement, immigration, and the Centers for Disease Control and Prevention have also entrusted Palantir with data management, raising concerns about personal data privacy.

Silicon Valley=In-Yeob Kim, Correspondent inside@hankyung.com