California Governor Gavin Newsom, a Democrat, has struck a deal with Anthropic to provide California government agencies with access to Claude at a reduced price. This agreement arrives as many businesses grapple with the high costs associated with enterprise-level subscriptions to artificial intelligence tools. Under the terms of this arrangement, all state agencies and local governments will be able to use Claude, Anthropic’s AI chatbot, along with training and support from the company. A statement from the Governor’s office highlights that 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,” Governor Newsom said in a statement. This deal follows Newsom’s March executive order, which aimed to accelerate the use of AI “to make government more efficient” while also upholding 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 stated at that time.

As Anthropic strengthens its ties with the state of California, the federal government has taken a more adversarial stance toward the OpenAI competitor. Earlier this year, Anthropic and the U.S. Department of Defense disagreed over a contract that would allow the government agency to deploy Claude for any lawful purpose. Anthropic wanted to include explicit protections to prevent the government from using its technology for surveillance of Americans or for deploying autonomous weapons without human oversight. However, Defense Secretary Pete Hegseth declined these terms, and the agency ultimately signed a deal with OpenAI instead. The government went so far as to label Anthropic a “supply-chain risk,” which prohibited the company from collaborating with any other Pentagon contractors.

While the state’s approach clearly differs from that 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” during negotiations for this Anthropic contract.