Eager to expand its federal presence, ServiceNow has forged a strategic partnership with the US government, providing exclusive discounts on its advanced AI solutions. The US General Services Administration (GSA) heralded this agreement under its OneGov initiative, describing it as a significant move towards optimizing governmental operations.

This latest agreement is part of GSA’s continuing efforts to consolidate IT purchases across federal agencies. By leveraging ServiceNow’s innovative AI tools, governmental agencies can achieve workflow efficiency gains projected to be as high as 30%, according to GSA.

Although specifics on pricing were sparse, the deal promises a staggering 70% discount for eligible federal customers upgrading to ServiceNow’s ITSM Pro or Pro Plus packages. Similarly, a standalone ITSM Pro upgrade comes with a 40% markdown, applicable until September 2026 under a one-year contract framework, while the overarching agreement runs until September 2028.

ServiceNow has steadily integrated generative and agentic AI into its offerings, aligning with industry giants’ efforts to embed AI across platforms. The company’s AI currently supports over 200 million tasks annually within federal entities, highlighting both its penetration and potential for growth, given that the public sector currently constitutes roughly 10% of ServiceNow’s revenue.

Despite the lucrative terms of this deal, ServiceNow faces stiff competition from other tech industry titans within the federal sphere. Google, OpenAI, and Anthropic have all secured OneGov contracts, featuring groundbreaking discounts varying from mere pennies to free service periods.

The short duration of these contracts raises concerns over potential future cost hikes as federal agencies might become reliant on the software. The GSA has been urged to consider strategies to mitigate such eventualities, yet concrete responses to these concerns remain pending.

ServiceNow has not issued further comments regarding the intricacies of this deal.