Microsoft to offer Copilot for free to some government customers

Microsoft will offer a host of its cloud services at a discounted price to the federal government, the General Services Administration announced Tuesday, including its artificial intelligence assistant Copilot at no cost to some agencies. 

The OneGov deal makes Microsoft the latest technology firm to leverage steep discounts on its cloud products to expand adoption within the federal government. It comes on the heels of GSA’s deals with industry competitors like OpenAI, Anthropic and Google, which are separately offering their AI models to the government for a dollar or less. 

Under the new agreement, Microsoft will offer its subscription service, Microsoft 365, Azure Cloud Services, and Dynamics 365 — the company’s suite of business management apps — for a “discounted price” for up to 36 months. Other Microsoft cybersecurity and monitoring tools, like Microsoft Entra ID Governance, are also included.

Copilot, one of Microsoft’s more high-profile AI products, will be available to Microsoft 365 customers at no cost for the next 12 months, the technology company announced in a blog Tuesday. 

Microsoft’s G5 licensing agreements are for government agencies with “advanced security” and offer more features than the company’s G3 plan, including threat protection and real-time intelligence reporting, according to the GSA. Microsoft said there are “millions” of existing G5 customers.

Some agencies might also be eligible to receive Microsoft Dynamics 365 for free for up to one year if they have “eligible workloads,” the GSA added. According to Microsoft, this product can be used for agency tasks like supply chain management and field responsiveness. 

The GSA estimated $3.1 billion could be saved in the first year of this offer. 

“The OneGov deal makes Microsoft the latest technology firm to leverage steep discounts on its cloud products to expand use in the federal government,” said Josh Gruenbaum, commissioner of the GSA’s Federal Acquisition Service. 

Microsoft 365 Copilot is included under the company’s Government Cloud Community, which has FedRAMP Moderate authorization, a Microsoft spokesperson told FedScoop. The company hopes to receive FedRAMP High authorization for the Copilot product later this year, the spokesperson added. 

Microsoft 365 and Azure services are authorized at the FedRAMP High level. 

FedRAMP announced earlier this month that it will begin prioritizing certain AI cloud services for FedRAMP authorization, days after FedScoop reported that GSA was considering the move. Unlike its competitors, Microsoft has extensive experience selling cloud services to the government, while companies like OpenAI and Anthropic have generally partnered with companies, including Microsoft, that have already gone through the FedRAMP process. 

OpenAI and Anthropic are currently offering their models to federal agencies separately for $1 per agency for one year, whereas Google unveiled its “Gemini for Government” AI platform last week, which will cost agencies $0.47 each for one year. 

It is not clear what pricing for Google or Microsoft’s products will look like after a year. OpenAI previously told FedScoop that agencies will either need to enter a paid agreement for ChatGPT Enterprise or conclude access at the end of the trial. An Anthropic spokesperson said it plans to work with the government on pricing that balances “accessibility with affordability.” 

Microsoft has been engaged in similar government deals for years, initially offering its products at a lower rate to encourage rapid use in agencies. 

“For more than four decades, Microsoft has been privileged to support the US government’s

most vital missions. Today, as we stand at the forefront of the AI era, we reaffirm our

dedication to serving as a trusted partner,” Chris Barry, corporate vice president of US Public Sector Industries at Microsoft, wrote in the blog. 

Microsoft said it will also commit $20 million in other support services to host workshops and  help with the implementation of its products at agencies. 

“These investments reflect our belief that technology’s greatest value lies in its ability to empower people,” Barry wrote. “Taken together, we anticipate these services have the potential to deliver more than $6 billion in total estimated value over three years.”

The GSA has repeatedly marketed the OneGov deals as support for the White House’s AI Action Plan, which mandates that federal agencies provide access to large language models for employees who could benefit from them. The agency and the broader administration believe AI can be used to streamline workflows and assist in time-consuming tasks.