Ever since the launch of ChatGPT, AI companies have been racing to gain a foothold in government in more ways than one. Most recently, that’s meant luring government users with attractive low prices for their products.
Within the last week, both OpenAI and Anthropic have introduced special prices for government versions of their generative AI chatbots, ChatGPT and Claude, and xAI announced its Grok for Government in mid-July. OpenAI and Anthropic are both offering their chatbots to federal agencies for one year for a nominal price of $1. Anthropic appeared to try to one-up OpenAI’s announcement by saying all three branches of government could access a special price for Claude, while ChatGPT will be available to the executive branch for the low intro price.
Securing government customers can be a great way for tech businesses to secure large userbases and income. The US government says it spends more than $100 billion a year on “IT and cyber-related investments, including the purchase of software licenses.” That $1 price follows a tried-and-true enterprise software playbook used by companies like Slack: get as many users as you can in hopes that a service becomes so valuable that employers have to keep paying for it, eventually at a much higher cost. Already, Anthropic, OpenAI, Google, and xAI have each secured contracts that could be worth up to $200 million to help modernize the US Defense Department. As they jockey for power in other parts of the government, giving their product away nearly for free (at first) could help give OpenAI or Anthropic an edge.
As the government struggles over how and whether to regulate AI, there could also be a soft power benefit to getting its workers familiar with and reliant on these services — and perhaps, by extension, more reluctant to kneecap them. OpenAI, in its announcement, claimed its offering “delivers on a core pillar of the Trump Administration’s AI Action Plan by making powerful AI tools available across the federal government so that workers can spend less time on red tape and paperwork, and more time doing what they came to public service to do: serve the American people.”
[Notigroup Newsroom in collaboration with other media outlets, with information from the following sources]
