California Partners with Anthropic to Bring Claude AI to Government at 50% Discount

California Governor Gavin Newsom and Anthropic have reached an agreement that will give state agencies and local government bodies access to Claude at a reduced price. The partnership comes as organisations across the public and private sectors continue to face rising costs of enterprise AI subscriptions.

Under the agreement, California state agencies and local governments will be able to use Anthropic’s AI assistant, Claude, and receive training, technical support, and implementation guidance from the company. According to a press release issued by the Governor’s office, Claude will assist government employees with tasks such as drafting documents, analysing information, and improving administrative efficiency.

“AI should not replace the human work of government; it should help our workers move faster, solve problems more effectively, and deliver better results for Californians,” Governor Newsom said in a statement.

The announcement follows an executive order signed by Newsom in March to accelerate the responsible adoption of artificial intelligence across California’s government operations while maintaining robust safety and oversight standards.

“While others in Washington are designing policy and creating contracts in the shadow of misuse, we’re focused on doing this the right way,” Newsom said when introducing the initiative.

As Anthropic strengthens its relationship with the California government, the company continues to face a very different situation at the federal level. Earlier this year, Anthropic and the U.S. Department of Defence disagreed over a proposed contract that would have allowed the agency to deploy Claude for any lawful purpose. Anthropic sought contractual safeguards preventing its AI technology from being used for mass surveillance of Americans or for fully autonomous weapons without human oversight. Defence Secretary Pete Hegseth declined those conditions, and the Pentagon ultimately awarded the contract to OpenAI instead. The federal government also designated Anthropic as a “supply-chain risk,” a classification that prevented the company from working with other Defence Department contractors.

Despite the federal government’s position, California officials indicated that the designation played no role in their decision-making process. Speaking with POLITICO, California Chief Information Officer and Department of Technology Director Chris Given said the federal “supply-chain risk” designation “just didn’t come up” during negotiations surrounding the Anthropic agreement.