OpenAI ends $1-a-year US government AI deal, shifts to 50% discount

OpenAI is pulling the plug on the most generous enterprise software deal in recent memory. The company’s $1-per-year pilot program that gave federal agencies access to ChatGPT Enterprise is ending, replaced by a usage-based pricing structure at a 50% discount off standard rates.

The new agreement kicks in on October 1, 2026, and runs for more than two years.

What the pilot actually accomplished

The $1-per-year deal launched in August 2025 as part of the General Services Administration’s OneGov marketplace. Its purpose was straightforward: get AI tools into the hands of federal workers and see what happens.

Some 3.5 million federal employees ended up using ChatGPT Enterprise through the program. The pilot reportedly generated $1.4 billion in cost savings for taxpayers, achieved largely through reduced administrative paperwork and operational efficiencies.

The program was initiated under the Trump administration’s AI Action Plan, which pushed for deploying cutting-edge technology across federal entities at minimal cost.

Expanding beyond federal agencies

Perhaps the most strategically significant piece of this announcement is OpenAI’s plan to extend the 50% discount beyond federal agencies. State, local, and tribal governments will also be eligible for the same discounted rates.

What this means going forward

The transition from a symbolic $1 price tag to actual usage-based billing will test whether AI adoption in government is driven by genuine utility or just the absence of cost friction. The October 2026 start date gives agencies roughly a year to build the new costs into their budgets.

For the broader AI industry, OpenAI’s government pricing strategy sets a benchmark. Anthropic has launched similar pricing structures aimed at government clients, creating a competitive landscape where AI companies are bidding for the right to power the federal bureaucracy.

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