Officials at multiple US Government federal agencies have raised concerns about the safety and reliability of Elon Musk’s xAI AI tools. Federal officials, including at the GSA and NSA, raised concerns about Grok’s security, manipulation susceptibility, and data poisoning. With xAI under the Elon Musk business umbrella, the news could flag concerns around Musk’s other tech companies, including SpaceX and Tesla (TSLA).

Previously, the Pentagon decided to use xAI’s Grok chatbot in classified settings despite safety and reliability concerns from multiple federal agencies. It views 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, a procurement arm of the federal government, in recent months sounded an alarm with White House officials about potential safety issues with Grok, people familiar with the matter said. Other GSA officials under him had also raised safety concerns about Grok, which they viewed as sycophantic and too susceptible to manipulation or corruption by faulty or biased data, creating a potential system risk.

Throughout the government, agencies are racing to deploy AI for a host of purposes, but the debate over which models to use has become increasingly political. While xAI is looking like the likely choice for the future, warnings over safety concerns could leak into investment concerns for its upcoming IPO and perhaps sister company Tesla (TSLA).

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Furthermore, the impact on TSLA stock has already been felt, as TSLA shares fell 2% on Friday. The stock is now down 3% in the past week and over 7% in the last 30 days. The stock’s rocky start to 2026 has led to mixed reactions and forecasts by Wall Street.

Looking at current price predictions, analysts are mixed on Tesla’s future in 2026. The average forecast for TSLA in 2026 is $480.00, a 15% uptick from current prices. Analysts at Wells Fargo are bullish on Tesla (TSLA) stock in the long run, thanks to robotics. Alternatively, on Tuesday, GLJ Research analyst Gordon Johnson called Optimus a “delusion,” putting a 15% to 20% probability that Tesla will ever deliver meaningful robotics revenue. Wall Street bulls are “assigning near-certainty to it. That’s not investing. That’s speculation,” he added.