Former top US government tech advisor says getting OpenAI's $1 deals to work could come at a high cost

The enticing $1-a-year offers from OpenAI and Anthropic for government partnerships may come with significant hidden costs, warns Sid Ghatak, a former tech advisor to the Biden administration. In a recent interview, Ghatak emphasized that while the initial price seems attractive, the government must carefully evaluate the broader financial implications of implementing AI solutions. Ghatak raised critical questions about what the nominal fee truly entails. He pointed out that the government could face additional expenses related to training AI models tailored to specific needs, as well as potential ongoing charges for usage. "What does $1 really mean? Does that mean access to the open model, and will compute costs accumulate incrementally?" he questioned, highlighting the complexities involved in deploying AI technologies. Beyond these dollar deals, Ghatak noted that OpenAI has already secured substantial contracts with the government, including a $200 million agreement from the Department of Defense to create AI tools for national security. As the former director at the General Services Administration, Ghatak has been integral to shaping AI policy, contributing to the government's AI executive order released in October 2023 and co-authoring the AI Maturity Model, which assesses AI products for effective adoption. "The government has to be really careful and understand what the full cost of these solutions is beyond the very attractive zero to $1 charge," Ghatak cautioned. He pointed out that the expenses associated with AI extend beyond payments to companies like OpenAI and Google. The government must also invest heavily in data consolidation to ensure the effectiveness of AI applications. Last month, both OpenAI and Anthropic announced they would provide federal agencies with a year's access to their AI models for only $1 per agency. Meanwhile, Google has introduced its Gemini for Government program, offering its AI tools to federal agencies at a cost of $0.47 for a year's access in 2026. Former GSA Chief Information Officer Casey Coleman remarked that giving federal workers access to AI could significantly enhance their productivity, allowing them to focus on more creative and impactful work rather than administrative tasks.