Microsoft Corp. (MSFT  ) has agreed to provide the U.S. General Services Administration with potential savings of $3.1 billion over a year on cloud services used by government agencies

Microsoft Offers $6 Billion In Savings On Cloud, Office, AI tools

Microsoft announced that the savings, totaling over $6 billion over three years, will apply to its Office productivity subscriptions, Azure cloud services, Dynamics 365 business applications, and Sentinel cybersecurity software, CNBC reported on Tuesday.

Agencies will also get one year of complimentary access to the Copilot AI assistant for millions of Microsoft 365 G5 users. Josh Gruenbaum, Commissioner of the GSA's Federal Acquisition Service, confirmed that the discounted rates are readily available. To benefit from the Microsoft savings, agencies must purchase through the GSA until September 2026.

"It's no surprise that Microsoft is one of the most critical partners for the federal government in terms of its software and the tooling that we use around both the civilian side and the defense side," said Gruenbaum.

Microsoft's annual U.S. government revenue is estimated to be in the mid- to high-single-digit billions of dollars, with around $80 billion in spending linked to IT, as per the publication.

Tech Giants Expand AI And Cloud Access For US Federal Agencies

This move by Microsoft comes at a time when other tech giants are also making significant inroads into the U.S. government sector.

Since President Donald Trump returned to the White House in January, the GSA has been pursuing a spending consolidation initiative called OneGov, aimed at reducing costs. Companies including Adobe (ADBE  ), Amazon.com (AMZN  ), Google (GOOG  ) (GOOGL  ), and Salesforce (CRM  ) have already offered discounts.

In August, OpenAI CEO Sam Altman secured a partnership with the U.S. GSA, providing federal agencies access to the company's leading AI models through ChatGPT Enterprise for $1 per agency for the next year.

Prior to that, Oracle Corporation (ORCL  ) announced substantial price reductions for its database software and cloud-computing services for government agencies in July.

According to Benzinga Edge Stock Rankings, Microsoft has a growth score of 97.74% and a momentum rating of 79.42.