Multiple U.S. federal agencies have raised significant safety and reliability concerns about Elon Musk‘s xAI and its Grok chatbot, citing risks of manipulation and data poisoning. Despite these warnings, the Pentagon has decided to use Grok in classified settings, viewing competitor Anthropic as “too woke.” The political debate over AI adoption in government coincides with a recent decline in Tesla (TSLA) stock, which fell 2% on Friday, amplifying investor scrutiny as xAI approaches a potential IPO.
Officials at multiple U.S. government agencies, including the GSA and NSA, have raised concerns about the safety and reliability of Elon Musk‘s xAI tools. They specifically warned about the Grok chatbot’s security, its susceptibility to manipulation, and risks from data poisoning.
The Pentagon decided to use Grok in classified settings despite these safety concerns from other federal agencies. It views competitor Anthropic as “too woke” due to its safety stances, while xAI agreed to military usage guidelines.
Ed Forst, the top official at the General Services Administration, recently sounded an alarm with White House officials about potential safety issues with Grok. Other GSA officials viewed the chatbot as sycophantic and too susceptible to manipulation or corruption by faulty or biased data.
The government-wide race to deploy AI has become increasingly political, with xAI looking like a likely choice for future use. Warnings over its safety could leak into investment concerns for its upcoming IPO and perhaps affect sister company Tesla (TSLA).
The impact on TSLA stock has already been felt, as shares fell 2% on Friday. The stock is now down 3% in the past week and over 7% in the last 30 days, leading to mixed reactions and forecasts on Wall Street.
Analysts are mixed on Tesla’s future in 2026, with an average price forecast of $480, a 15% uptick from current prices. Analysts at Wells Fargo are bullish on the stock in the long run, thanks to robotics.
Alternatively, GLJ Research analyst Gordon Johnson recently called Optimus a “delusion,” putting a 15% to 20% probability that Tesla will ever deliver meaningful robotics revenue. He stated Wall Street bulls are “assigning near-certainty to it. That’s not investing. That’s speculation.”
