Microsoft 365 Copilot is now free of cost for 12 months for Federal Agencies

Recently, OpenAI announced a $1 ChatGPT Enterprise offering for federal branches, while Anthropic introduced Claude AI at the same price point. Now, Microsoft is jumping in, as it has parterned with the U.S. General Services Administration (GSA) and announced a comprehensive agreement to deliver a suite of AI, cloud, and productivity services to federal agencies.

The deal includes Microsoft 365 Copilot at no cost for up to 12 months for millions of existing Microsoft G5 users, helping agencies adopt secure AI tools that enhance operations, strengthen security, and accelerate innovation for the American public.

This governmentwide unified pricing strategy is projected to save agencies nearly $3 billion in the first year, marking a milestone in GSA’s OneGov strategy. Under this agreement, federal agencies can access advanced AI features now integrated into the tools they already use.

Microsoft outlined several benefits, including:

• Transforming productivity with Microsoft 365 Copilot to automate workflows, analyze data, and improve collaboration.
• Driving automation with AI agents at no per-agent fees for citizen inquiries, case management, and contact centers.
• Accelerating cloud modernization through Azure discounts and waived egress fees to improve interagency collaboration.
• Streamlining operations with Dynamics 365 to enhance citizen services and optimize supply chains.
• Strengthening security using Entra ID and Sentinel to support the federal Zero Trust framework.

Agencies can opt into these offerings through September 2026, with discounted pricing locked in for up to 36 months. Microsoft confirmed these services meet strict security standards, with FedRAMP High authorizations for Microsoft 365, Azure, and other AI services. Copilot has also received provisional authorization from the U.S. Department of Defense, with FedRAMP High expected soon.

Beyond technology savings, Microsoft will invest $20 million in support services and workshops to help agencies optimize costs, reduce software duplication, and adopt automation. Taken together, the agreement is expected to deliver more than $6 billion in value over three years.