Anthropic and Gov. Newsom forge deal allowing California government to use Claude at half price

In a significant move, Governor Gavin Newsom of California has entered into an agreement with Anthropic, allowing state government agencies to utilize the AI chatbot Claude at a reduced cost. This initiative comes at a time when many organizations are grappling with the financial burden of enterprise AI subscriptions. The deal ensures that all state and local government bodies will gain access to Claude, along with necessary training and support from Anthropic. According to a statement from the Governor's office, Claude is expected to assist employees in drafting documents and analyzing data more efficiently. Governor Newsom emphasized, "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." This pact aligns with Newsom's earlier executive order aimed at promoting AI utilization to enhance government efficiency while upholding safety standards. He remarked, "While others in Washington are designing policy and creating contracts in the shadow of misuse, we’re focused on doing this the right way." Despite this progressive step for California, Anthropic has faced challenges on the federal level. Earlier this year, the company and the U.S. Department of Defense had a contentious discussion regarding a contract that would allow the agency to use Claude for various purposes. Anthropic sought to ensure protections against the potential misuse of its technology for surveillance or autonomous weaponry, but these concerns were dismissed by Defense Secretary Pete Hegseth, who ultimately awarded a contract to OpenAI instead. The federal government even classified Anthropic as a “supply-chain risk,” which restricted the company from collaborating with other Pentagon contractors. However, during the negotiations for this new contract, California's Chief Information Officer, Chris Given, noted that the supply-chain risk designation was not a point of discussion, highlighting a divergent approach between state and federal policies.