Amazon Web Services to cut the U.S. government a $1 billion break

Amazon Web Services (AWS) is showering the U.S. government with discounts.

Federal agencies will receive up to $1 billion in credits to be used on cloud services, modernization, and training through the end of 2028, the U.S. General Services Administration said Thursday. The "innovative agreement will fast-track digital transformation and propel public sector AI innovation," according to its release.

Shares in Amazon rose 1.4% during the first hour

“The Trump Administration is rapidly modernizing out-of-date government systems, streamlining processes, and delivering savings to the American taxpayer through centralized procurement,” said GSA Acting Administrator Michael Rigas.

The "landmark agreement" positions AWS "to build the foundation for a more secure and innovative government of tomorrow," said AWS CEO Matt Garman.

The partnership comes just a day after the GSA unveiled it had also struck a deal with OpenAI to cut costs and save taxpayer dollars. U.S. federal agencies will receive its ChatGPT Enterprise product for $1 through the next year, "helping public servants deliver for the American people," OpenAI CEO Sam Altman said in a release. Workers will also receive ChatGPT features such as Advanced Voice Mode for an additional 60-day period.

Both companies have sought to strengthen their ties with the Trump administration this year.

Amazon contributed $1 million in cash to President Donald Trump’s inauguration and also provided an in‑kind donation by streaming the ceremony on Prime Video, valued at another $1 million. The company also served as a corporate sponsor of the White House Easter Egg Roll in April.

Similarly, OpenAI executives donated $1 million to Trump's inaugural committee. In June, the company launched a new offering called OpenAI for Government and said it was awarded a contract of up to $200 million by the U.S. Department of Defense.

CEO Jeff Bezos has also reportedly been trying to secure more federal contracts for his space technology company Blue Origin, sources told The Wall Journal. Bezos and other Blue Origin executives met with Trump on at least two occasions in June, according to the report.

Former Washington Post executive editor Mary Barton voiced concerns to The Atlantic in June that fear of a Trump backlash may be influencing media leaders such as Bezos, the Post's owner.

“They’re afraid of being made a target by Trump, that he’s going to do severe damage to their other commercial interests,” Baron said. “I think in the case of Bezos, he’s afraid of the impact that Trump can have on Amazon, which has enormous contracts — particularly in the area of cloud-computing services — with the federal government.”