Governor Gavin Newsom and Anthropic have sealed an agreement that allows California government agencies to access Claude, Anthropic’s AI chatbot, at half the usual price. This move comes as businesses grapple with the escalating costs of enterprise-level AI tools.

The deal offers state and local governments training and support from Anthropic, enabling them to use Claude for document drafting and information analysis. Newsom stated that AI should enhance human work rather than replace it, aiming to help government employees move faster and deliver better results for Californians.

This agreement is part of a broader strategy outlined in the Governor’s March executive order, which seeks to accelerate the integration of AI into government operations for efficiency gains. However, this path diverges from federal actions, notably when Anthropic rejected a contract with the U.S. Department of Defense over concerns about misuse.

In a somewhat ironic twist, while California is forging closer ties with Anthropic, the federal government has designated the company as a ‘supply-chain risk,’ preventing it from working with Pentagon contractors due to its refusal to comply with certain conditions.