Google is close to finalising a cloud services deal with the US government that includes major price cuts, reports Financial Times. The report quotes a senior official from the General Services Administration (GSA) who said that the tech giant is likely to offer “substantial discounts,” with the deal expected to be completed in the coming weeks. This development comes shortly after Oracle agreed to reduce prices by up to 75% on some software contracts, and to offer broad discounts on its cloud computing services.
Google’s deal is expected to land “in a similar spot,” said the GSA official involved in the negotiations. The agency, as per the report, is also in talks with Amazon Web Services (AWS) and Microsoft Azure, adding that the discussions are at an earlier stage. “Every single one of those companies is totally bought in, they understand the mission,” said the official, suggesting cooperation across the board.
Together, Google, Amazon, Microsoft, and Oracle account for the bulk of the US government’s cloud services spend, which currently exceeds $20 billion annually.
Cost-cutting drive led by Trump’s procurement reform
The push for lower prices comes under a renewed Trump administration effort to reduce government procurement costs. It’s part of a broader strategy led by the Department of Government Efficiency (DOGE), formerly overseen by Tesla CEO Elon Musk. Alongside cloud services, the GSA has renegotiated deals with consulting firms like Deloitte and Booz Allen Hamilton, and is also targeting contracts with ride-hailing companies.
Earlier in April, Google had already agreed to a 71% temporary discount on some Workspace contracts until the end of September.
The negotiations also reflect a shift in the relationship between Big Tech and the Trump administration. During his first term, Amazon lost a $10 billion defense contract — the Jedi project — which the company claimed was due to a personal vendetta linked to Trump’s opposition to the Washington Post, owned by Amazon founder Jeff Bezos. The contract was later cancelled and replaced by a $9 billion project awarded jointly to AWS, Google, Microsoft, and Oracle under the Biden administration.
This time around, tech CEOs have taken a more conciliatory approach. Google’s Sundar Pichai and Meta’s Mark Zuckerberg appeared at Trump’s inauguration, while diversity programmes within these companies have since been scaled back. Even Bezos has worked to repair ties with the president, whom he once called “a threat to democracy.”
Google’s deal is expected to land “in a similar spot,” said the GSA official involved in the negotiations. The agency, as per the report, is also in talks with Amazon Web Services (AWS) and Microsoft Azure, adding that the discussions are at an earlier stage. “Every single one of those companies is totally bought in, they understand the mission,” said the official, suggesting cooperation across the board.
Together, Google, Amazon, Microsoft, and Oracle account for the bulk of the US government’s cloud services spend, which currently exceeds $20 billion annually.
Cost-cutting drive led by Trump’s procurement reform
The push for lower prices comes under a renewed Trump administration effort to reduce government procurement costs. It’s part of a broader strategy led by the Department of Government Efficiency (DOGE), formerly overseen by Tesla CEO Elon Musk. Alongside cloud services, the GSA has renegotiated deals with consulting firms like Deloitte and Booz Allen Hamilton, and is also targeting contracts with ride-hailing companies.
Earlier in April, Google had already agreed to a 71% temporary discount on some Workspace contracts until the end of September.
The negotiations also reflect a shift in the relationship between Big Tech and the Trump administration. During his first term, Amazon lost a $10 billion defense contract — the Jedi project — which the company claimed was due to a personal vendetta linked to Trump’s opposition to the Washington Post, owned by Amazon founder Jeff Bezos. The contract was later cancelled and replaced by a $9 billion project awarded jointly to AWS, Google, Microsoft, and Oracle under the Biden administration.
This time around, tech CEOs have taken a more conciliatory approach. Google’s Sundar Pichai and Meta’s Mark Zuckerberg appeared at Trump’s inauguration, while diversity programmes within these companies have since been scaled back. Even Bezos has worked to repair ties with the president, whom he once called “a threat to democracy.”
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