Google Joins Government AI Discount Frenzy, Undercuts Competition With $0.47 Deal

It's now safe to say the gang's all here when it comes to big generative AI model makers signing dollar discount deals with Uncle Sam. Google has joined Anthropic and OpenAI, inking questionable short-term discount terms for government agencies. 

Not to be outdone by the makers of ChatGPT and Claude, who each agreed to sell their services to the government for $1 per agency, Google has agreed to even deeper discount terms, pitching its various government-capable AI products for just $0.47 per agency, valid through 2026. 

The half-a-buck Google AI deal is part of the General Services Administration's OneGov purchasing strategy that seeks to streamline the purchasing of products for federal agencies. Agencies looking to add some Google Gemini AI to their operations, for instance, won't need to establish new terms with Google under the $0.47 deal. Instead, they simply agree to terms previously negotiated on behalf of the whole federal government by the GSA. 

And like the other recent discount AI deals announced by GSA as part of its OneGov contracting initiative, Google's also expires after a year. Agencies that sign up for discounted services today and become dependent on them have no way of knowing what comes after the discount period ends. Google told us that even though it is not sure, with a spokesperson only saying that it would explore options toward the end of the discount period.

As we pointed out in another OneGov story, these deals open the possibility of a new generation of vendor lock-in. Any particular brand of AI could quickly become indispensable to an agency's workload before anyone knows what the long-term cost is.

That's part of the reason both prior AI OneGov deals with OpenAI and Anthropic have been challenged by AI firm Ask Sage and its founder, former Air Force and Space Force Chief Software Officer Nicolas Chaillan. 

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Ask Sage's bid protests, copies of which have been viewed by The Register, argue that the discounts could lead to vendor lock-in in violation of the government's Federal Acquisition Regulation, as well as violating requirements pertaining to commercial pricing and competition. Ask Sage, we note, provides a vendor-agnostic AI platform for government agencies and is protesting the bid as an interested party. 

Chaillan told The Register of a number of other concerns he has about the OneGov contracts that we're still looking into, including the fact that the contracts with OpenAI and Anthropic are still private despite his asking as part of the bid protest process. Timely bid protests are grounds to halt an award, but Government Accountability Office dockets for the protest do not indicate whether that criterion has been met with regard to the OpenAI and Anthropic deals. 

"The $1 deal was already far outside the bounds of what could reasonably sustain secure, enterprise-grade AI for government," Chaillan told us in an emailed statement. "Google’s 47-cent offer takes that even further. Pricing this low is not about serving agencies — it’s about forcing dependence on a single vendor, hiding future costs, and squeezing out fair competition. What looks cheap today will leave the government with higher costs, fewer options, and greater risk tomorrow."

To add some additional concern to the Google Gemini deal, it won't just come with the typical government-certified AI services, agentic bots, research tools and the like. The GSA took the time to spell out that government agencies were also getting "video and image generation capabilities" as part of the deal, if that's the sort of thing that concerns you. 

The GSA didn't respond to questions before publication. ®