Will spread over three years
Microsoft has agreed to provide the US government with up to $6 billion in discounts over the next three years.
The discounts, agreed with the US General Services Administration (GSA) under the OneGov Deal, will apply to Azure cloud computing services, Microsoft 365, Copilot, Dynamics 365, and cybersecurity tools. The first year alone could see the government saving up to $3.1bn.
“GSA is proud to partner with technology companies, like Microsoft, to advance AI adoption across the federal government, a key priority of the Trump Administration,” said GSA deputy administrator Stephen Ehikian. “We urge our federal partners to leverage these agreements, providing government workers with transformative AI tools that streamline operations, cut costs, and enhance results.”
“For more than four decades, Microsoft has partnered with the US Government to serve the American people,” added Satya Nadella, chairman and CEO, Microsoft. “With this new agreement with the US General Services Administration, including a no-cost Microsoft 365 Copilot offer, we will help federal agencies use AI and digital technologies to improve citizen services, strengthen security, and save taxpayers more than $3 billion in the first year alone.”
Agencies can opt in for the offer through to September 2026, with discounts applying for up to 36 months on some products.
Microsoft is the latest company to sign such a deal with the GSA, though it previously established a "Government-wide Microsoft Acquisition Strategy" in January of this year. In August 2025, Amazon Web Services (AWS) agreed to up to $1bn in cloud savings through to the end of 2028.
Oracle and Google have committed to offering government agencies significant discounts on their services, though neither provided a total expected number for the savings that will be made through said discounts.
Microsoft has been in the hot seat with the US Department of Defense after an investigation found that a program allowed Microsoft to use Chinese coders remotely supervised by US contractors to support DoD cloud systems for nearly a decade. Last week, Secretary of Defense Pete Hegseth said that the program was no longer operational.
Source: DCD
