Microsoft has entered into a comprehensive agreement with the U.S. General Services Administration (GSA) to accelerate AI adoption across federal agencies. The initiative offers Microsoft 365 Copilot at no cost for up to 12 months to millions of existing G5 users and is expected to generate $3 billion in cost savings in the first year under a unified governmentwide pricing model.
The deal, which supports the administration’s AI Action Plan, gives agencies access to a broad portfolio of AI, cloud, and productivity services, including Azure, Dynamics 365, Microsoft Entra ID, and Sentinel. Federal agencies can opt in to these offerings through September 2026, with discounts lasting up to three years.
The agreement focuses on five priorities: automating workflows with Microsoft 365 and Copilot, enabling AI agents for citizen services without per-agent fees, accelerating cloud modernization with waived egress costs, streamlining operations through Dynamics 365, and strengthening cybersecurity with integrated identity and threat protections.
Microsoft highlighted that its platforms already hold FedRAMP High and Department of Defense authorizations, ensuring compliance with more than 400 NIST security controls. The company also committed $20 million in support services and training, projecting a total value of more than $6 billion over three years.