OpenAI's $1 Government Deal: A Strategic Move into Federal AI

Updated on Aug 11

OpenAI made a deal with the U.S. General Services Administration to provide ChatGPT Enterprise to federal agencies for just $1 per year.

OpenAI is taking a serious aim at becoming the AI partner of choice for the United State’s government. In a June, the company, OpenAI announced that any federal agency can purchase ChatGPT Enterprise for just $1 per year in a new blanket purchase agreement with the General Services Administration (GSA). With this aggressive approach, OpenAI will work to deploy ChatGPT Enterprise into the workflows of as much of the government as possible, including everything from administrative assistance to national security—all in a matter of months.. If successful, OpenAI's actions could have an impact on how generative AI will be adopted by the public sector

By making this incredibly low-priced contract available, OpenAI is effectively putting competitors like Anthropic, Google, and Amazon at a disadvantage to develop or amend their own federal engagement strategies. It also shows that OpenAI is prioritizing getting the government to adopt their products first to build institutional trust and capture the necessary infrastructure to delivery their products before any competitors.