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

California Governor Gavin Newsom and AI company Anthropic have reached a deal that grants state agencies access to the Claude AI chatbot at a significantly reduced price. The agreement covers all state agencies and local governments, providing them with Claude along with training and support from Anthropic.

According to a press release from the governor's office, Claude will assist state employees in drafting documents and analyzing 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," Newsom said in a statement.

The deal follows Newsom's March executive order aimed at accelerating the use of AI to make government more efficient while 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 tightens its relationship with California, the federal government has taken an adversarial stance toward the OpenAI rival. Earlier this year, Anthropic clashed with the U.S. Department of Defense over a contract that would allow the agency to deploy Claude for any lawful use. Anthropic sought explicit protections to prevent the government from using the technology to surveil Americans or deploy autonomous weapons without human oversight. Defense Secretary Pete Hegseth refused, and the agency signed a deal with OpenAI instead. The government went as far as designating Anthropic a "supply-chain risk," barring the company from working with other Pentagon contractors.

California's CIO and Department of Technology director Chris Given told POLITICO that the supply-chain risk designation "just didn't come up" during negotiations for the Anthropic contract.