Microsoft to offer free AI tools, cloud discounts to US government agencies for rapid adoption

Microsoft and the US General Services Administration (GSA) have entered into a comprehensive agreement to accelerate artificial intelligence adoption across federal agencies. Under the deal, millions of existing Microsoft G5 users in government will gain access to Microsoft 365 Copilot at no cost for up to 12 months, as well as a suite of productivity, cloud, and security services. The partnership is positioned as part of GSA’s OneGov strategy and is projected to generate $3 billion in cost savings within the first year.

Features

The agreement enables agencies to integrate advanced AI tools into existing Microsoft platforms to support the administration’s AI Action Plan. Key benefits include:

Transforming productivity: A federal government-exclusive suite of Microsoft 365 and Copilot will allow agencies to automate workflows, analyze data, and improve collaboration.

AI-driven automation: AI agents, offered without per-agent fees, will help agencies streamline citizen inquiries, case management, and contact center operations.

Cloud modernization: Azure discounts and waived data egress fees will reduce barriers to interagency collaboration and support large-scale analytics and AI projects.

Operational efficiency: Dynamics 365 applications will optimize supply chains, enhance citizen services, and boost field responsiveness.

Strengthened security: Platforms such as Microsoft Entra ID and Sentinel will provide identity and threat protection, supporting the federal Zero Trust framework.

Agencies can opt in to these offers until September 2026, with discounted pricing available for up to 36 months.

Microsoft emphasized that security remains central to this initiative. Services including Microsoft 365 and Azure have achieved FedRAMP High authorization, with Microsoft 365 Copilot already provisionally authorized by the US Department of Defense.

Beyond technology, Microsoft is investing $20 million in support services to help agencies implement these tools and conduct cost-optimization workshops. Overall, the package is expected to deliver more than $6 billion in value over three years.

The agreement builds on Microsoft’s four decades of engagement with the US government, positioning the company as a partner in enabling secure AI innovation for public service.