It’s official: major AI providers are in fierce competition to secure their relationship with the US government through substantial discounts. Google has made a significant move by joining Anthropic and OpenAI, offering discounted rates to federal entities. Previously, both Anthropic and OpenAI had agreed to pricing capped at $1 per agency. Now, Google has entered the scene with an offer even more attractive at $0.47 per agency, valid through 2026.

This move is part of the General Services Administration’s OneGov strategy aimed at simplifying procurement processes across federal agencies. With this new Google Gemini AI offer, agencies looking to integrate advanced AI solutions can do so under pre-negotiated terms without the need for new agreements.

One of the main concerns with these short-term AI deals, however, is the potential for vendor lock-in, given their expiration within a year. As agencies become dependent on these services, future costing remains uncertain post-discount. Google representatives, when queried, hinted at reassessing options toward the end of the discount period.

These discounted deals have already attracted scrutiny, with protests filed alleging that such agreements might violate Federal Acquisition Regulation policies. AI company Ask Sage, an advocate for unbiased solutions, has been vocal about the potential monopolistic consequences of these arrangements.

Besides the costs, the Google Gemini AI offer extends to capabilities like video and image generation, reflecting a broadening scope of AI services being offered to federal agencies. However, clear guidance on handling these services remains pending.

If unchecked, these deals could open pathways to deep vendor integration, potentially inflating long-term costs while narrowing competition.