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

Governor Gavin Newsom (D-CA) and Anthropic have made a deal that allows California government agencies to use Claude at a discounted price. This agreement comes at a time when businesses are struggling to manage the hefty costs of enterprise subscriptions to AI tools. Under the deal, all state agencies and local governments will have access to Claude, Anthropic's AI chatbot, as well as training and support from Anthropic. A press release from the Governor's office says that Claude will help state employees draft documents and analyze information. "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," Governor Newsom said in a statement . This deal follows Newsom's March executive order that intends to accelerate the use of AI "to make government more efficient" while also maintaining stronger safety standards. "While others in Washington are designing policy and creating contracts in the shadow of misuse, we’re focused on doing this the right way," Newsom said at the time. As Anthropic forges a closer relationship with the state of California, the federal government has made an enemy out of the OpenAI rival. Earlier this year, Anthropic and the U.S. Department of Defense clashed over a contract that would give the government agency permission to deploy Claude for any lawful use. Anthropic sought to explicitly carve out protections that prevent the government from using its technology to surveil Americans or deploy autonomous weapons without human oversight. But Defense Secretary Pete Hegseth refused, and the agency signed a deal with OpenAI instead. The government went as far as to declare Anthropic a " supply-chain risk ," preventing the company from working with any other Pentagon contractors. While the state's path clearly diverges from the actions of the federal government, California's CIO and Department of Technology director Chris Given told POLITICO that the supply-chain risk designation "just didn't come up" while negotiating this Anthropic contract. Topics AI , Anthropic , california , Gavin Newsom When you purchase through links in our articles, we may earn a small commission . This doesn’t affect our editorial independence. Amanda Silberling Senior Writer Amanda Silberling is a senior writer at TechCrunch covering the intersection of technology and culture. She has also written for publications like Polygon, MTV, the Kenyon Review, NPR, and Business Insider. She is the co-host of Wow If True, a podcast about internet culture, with science fiction author Isabel J. Kim. Prior to joining TechCrunch, she worked as a grassroots organizer, museum educator, and film festival coordinator. She holds a B.A. in English from the University of Pennsylvania and served as a Princeton in Asia Fellow in Laos. You can contact or verify outreach from Amanda by emailing amanda@techcrunch.com or via encrypted message at @amanda.100 on Signal. View Bio November 4 Boston Last chance to save up to $190 on TechCrunch Founder Summit. Join 1,000+ founders and VCs at all stages for real-world scaling insights and connections that move the needle. Savings end June 26, 11:59 p.m. PT . REGISTER NOW Most Popular Ford rehires ‘gray beard’ engineers after AI falls short Anthony Ha Govee's smart nugget ice maker makes every iced drink feel like a luxury Aisha Malik Asian AI startups launch Mythos-like models as Anthropic's export ban drags on Kate Park Trump administration proposes axing brake-pedal requirement for AVs in a boost for Tesla Sean O'Kane Former Infosys chief has a new startup that wants to challenge the IT services world Jagmeet Singh OpenAI unveils its first custom chip, built by Broadcom Russell Brandom HaloBraid raises $7M from Seven Seven Six to end the six-hour hair salon appointment Dominic-Madori Davis