News

Anthropic Offers Government AI Services for $1, Escalating Competition with OpenAI

AI company expands beyond executive branch to include legislative and judicial branches.

• By John K. Waters
• 08/12/2025

Anthropic said Tuesday it will offer its Claude AI services to all three branches of the U.S. government for $1 per agency for one year, escalating a pricing war with rival OpenAI for lucrative government contracts.
The offer comes one week after OpenAI announced a similar $1 pricing structure for federal executive branch agencies, highlighting intensifying competition among AI companies to secure government customers as the technology gains adoption across the public sector.

Anthropic's proposal goes beyond OpenAI's executive branch focus, targeting legislative and judicial branches as well. The company will provide both Claude for Enterprise and Claude for Government, the latter designed to handle sensitive unclassified government data through FedRAMP High certification. (FedRAMP High represents the highest security baseline within the Federal Risk and Authorization Management Program.)

"As AI adoption leads to transformation across industries, we want to ensure that federal workers can fully harness these capabilities to better serve the American people," Anthropic said in a statement. "By removing cost barriers, we're enabling the government to access the same advanced AI that's already proving its value in the private sector."

Existing government partnerships

Anthropic has already established relationships with several government entities. The Department of Defense selected Claude through an agreement with a $200 million ceiling to advance national security capabilities. At Lawrence Livermore National Laboratory, the company said, 10,000 scientists and researchers use Claude daily. At the same time, the District of Columbia Department of Health has deployed the system to help residents access health services in multiple languages. The company partnered with the General Services Administration to streamline procurement processes, building on Claude's recent addition to the GSA schedule.

Security and infrastructure advantages

Anthropic emphasized its security credentials in the announcement, noting that Claude for Government meets FedRAMP High standards, "the most stringent requirement for handling unclassified sensitive government data."

The company provides access through partnerships with Amazon Web Services, Google Cloud, and Palantir, enabling agencies to utilize existing secure infrastructure while retaining data control. This multi-cloud strategy could offer operational advantages over competitors limited to a single cloud provider.

Broader industry competition

The government AI market has become increasingly competitive in recent months. In July, the Department of Defense announced contract awards of up to $200 million for AI development to Anthropic, Google, OpenAI, and Elon Musk's xAI. The same day, xAI announced its own government-focused AI suite.

OpenAI plans to open its first Washington office early next year and launched OpenAI for Government in June. The company's current government offering operates primarily through Microsoft's Azure Government Cloud.

Google, which was also recently added to the GSA's approved vendor list alongside OpenAI and Anthropic, has not announced similar pricing initiatives.

Technical support included

Anthropic's package includes technical support to assist agencies in integrating AI tools into their workflows. The company stated that it is coordinating with GSA and other government partners to ensure smooth implementation.

"We believe the U.S. public sector should have access to the most advanced AI capabilities to tackle complex challenges, from scientific research to constituent services," the company stated. "By combining broad accessibility with uncompromising security standards, we're helping ensure AI serves the public interest."

The offer is available to department or agency leadership at eligible organizations, with interested parties directed to contact the company directly.

Market implications

 The aggressive pricing strategies reflect both the strategic importance AI companies assign to government contracts and the competitive pressure within the enterprise AI market. Government adoption could serve as validation for AI capabilities while fostering long-term institutional relationships.

Anthropic concluded its announcement by encouraging industry-wide participation, stating: "We hope other companies will join us in taking similar steps to ensure the U.S. government has what it needs to operate as efficiently and effectively as possible."

The one-year promotional pricing period suggests companies are prioritizing market penetration over immediate revenue from government customers, betting that successful deployments will lead to larger, full-price contracts in the future.