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AI - September 2, 2025

Microsoft’s Free AI Assistant, Copilot, Set to Revolutionize US Federal Government Operations with $3.1 Billion in First-Year Savings

Microsoft’s Free AI Assistant, Copilot, Set to Revolutionize US Federal Government Operations with $3.1 Billion in First-Year Savings

In a significant development, millions of US federal government employees are poised to receive a complimentary AI assistant in the form of Microsoft Copilot on their devices. This move is part of an agreement between Microsoft and the General Services Administration (GSA), anticipated to save taxpayers an estimated $3.1 billion in its inaugural year.

The heart of this expansive new accord involves a complimentary year of Microsoft 365 Copilot for government workers utilizing the high-security G5 license. This initiative aims to expedite the distribution of cutting-edge AI tools among public servants, with the ultimate goal of enhancing government efficiency.

By positioning the US government at the vanguard of AI adoption, this deal directly responds to the administration’s AI Action Plan, designed to harness the potential of modern artificial intelligence across a wide spectrum, from managing citizen inquiries to analyzing intricate data.

“OneGov signifies a transformative shift in federal procurement, yielding substantial cost savings through leveraging the collective purchasing power of the entire federal government,” elucidated FAS Commissioner Josh Gruenbaum.

The free Copilot offer is exclusive to users on the Microsoft 365 G5 plan, catering to departments dealing with sensitive information and requiring stringent security measures. However, the advantages extend beyond this, facilitating agencies in automating mundane tasks, thereby enabling personnel to focus on critical assignments.

The agreement also simplifies and reduces costs for different departments as they modernize their technology. By offering substantial discounts on Azure cloud services and abolishing data transfer fees, it mitigates a persistent obstacle that has frequently impeded collaboration between agencies.

Addressing immediate security concerns associated with granting AI access to government systems, the deal emphasizes that Microsoft’s core cloud and AI services have already obtained FedRAMP High security authorization, a crucial standard for handling sensitive government data. Although the full FedRAMP High certification for Copilot is yet to be attained, it has already received provisional approval from the Department of Defense.

The package also includes advanced security tools like Microsoft Sentinel and Entra ID to support the government’s “zero trust” security strategy. GSA Deputy Administrator Stephen Ehikian urged government agencies to capitalize on these new tools.

“GSA is proud to collaborate with technology companies, such as Microsoft, in driving AI adoption across the federal government, a top priority of the current administration,” stated Ehikian. “We encourage our federal partners to leverage these agreements, providing government workers with transformative AI tools that streamline operations, cut costs, and improve outcomes.”

In addition to the agreement, Microsoft has pledged an extra $20 million towards support and training, including workshops designed to help agencies maximize the potential of the new tools and identify other areas for waste reduction.

Estimated to deliver over $6 billion in value over the subsequent three years, this package represents a significant stride in the collaboration between Microsoft and the US Government, with the goal of improving citizen services, bolstering security, and saving taxpayers substantial amounts in the initial year itself.

“With this new agreement with the US General Services Administration, including a no-cost Microsoft 365 Copilot offer, we will help federal agencies leverage AI and digital technologies to enhance citizen services, strengthen security, and save taxpayers more than $3 billion in the first year alone,” commented Satya Nadella, Chairman and CEO of Microsoft.

For nearly five decades, Microsoft has partnered with the US Government to serve the American people, focusing on modernizing IT infrastructure and advancing cybersecurity. Today, we are taking this partnership a step further…

For the millions working within the US government, this agreement with Microsoft promises to revolutionize their daily tasks with an AI-powered assistant.