Agencies will work directly with Amazon Web Services, cutting out resellers to save costs.
Jeff Bezos’ Amazon just gave the Trump administration a $1 billion cloud deal to speed up the federal government’s use of artificial intelligence and modern cloud systems.
The General Services Administration (GSA) made the agreement official on Thursday, with the deal running through 2028. It’s part of the White House’s “OneGov” strategy to make agencies ditch outdated tech and shift to Amazon Web Services (AWS), using pre-approved credits instead of cash.
The deal gives federal agencies a massive store credit, up to $1 billion in AWS cloud services, to help them rebuild their tech stacks from the ground up. It also includes cloud training for government staff and infrastructure to support large-scale AI systems like machine learning and language models.
Josh Gruenbaum, Federal Acquisition Service Commissioner and a senior DOGE staffer, helped negotiate the agreement. He called it “a foundational piece to help implement President Trump’s AI Action Plan.”
Trump’s OneGov plan moves cloud spending directly to Amazon
This is the second major OneGov contract signed since Trump returned to office and issued an executive order demanding centralized federal procurement.
The deal is being described by officials as a major part of the president’s tech overhaul strategy. Instead of dealing with dozens of private contractors, federal agencies will now draw cloud resources straight from Amazon.
Josh said the $1 billion AWS credit will mostly go toward core cloud services. That includes data storage, computing power, and tools that help run machine learning applications. The rest will cover workforce training and tools that help agencies move away from old on-premise systems.
Michael Rigas, the acting GSA Administrator, said the agreement will help agencies cut costs and deliver essential services faster using Amazon’s technology. “Through this new agreement with AWS, federal agencies will be able to enhance delivery of critical services, leverage cloud and advanced AI technologies, and dramatically reduce costs,” he said.
But the GSA is working on similar OneGov contracts with other providers. Deals are being discussed with both Microsoft and Google, while Oracle already signed a separate agreement giving agencies 75% off its own services. Still, Amazon is first in line and now has direct access to a government market that’s estimated to be worth $80 to $100 billion.
Deal pushes agencies to cut out middlemen and go direct
One of the most strategic parts of the Amazon agreement is its push to bypass third-party vendors. Instead of going through resellers or integrators, federal offices will work directly with AWS. Josh said the structure was intentional.
The design of the deal encourages agencies to cut out system integrators entirely, apparently proving the Trump administration’s plan to create market pressure inside the government by using bulk purchasing power. Josh explained, “We wanted to have a deep partnership that has durability and horizon to it, they jumped at it and they set this deal to basically live through this administration.”
Matt Garman, CEO of AWS, said the partnership gives the company more reach inside government and a bigger role in how agencies use AI. “As federal agencies adopt advanced technologies like artificial intelligence and machine learning, AWS is positioned to not only help them achieve immediate operational efficiencies, but also to build the foundation for a more secure and innovative government of tomorrow,” he said.
The GSA confirmed that this agreement is just the beginning. A senior official from the agency said, “We’re just getting started. This is a first-of-its-kind agreement, and there’s a lot more to come both in the cloud space and across other high-impact industries.”
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