Google (NASDAQ:GOOG) will be heavily discounting its cloud computing services for the U.S. government, Financial Times reported, citing a senior official at the General Services Administration (GSA).
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The U.S. government has intensified efforts to cut federal IT spending, targeting long-standing contracts with major technology providers. As a result, Big Tech companies—including Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Oracle (NYSE:ORCL)—have come under pressure to offer significant discounts on their cloud services.
The four businesses collectively are responsible for the majority of the government’s yearly expenditure on cloud services, which currently exceeds $20 billion.
“Every single of those companies is totally bought in, they understand the mission,” the senior official said. “We will get there with all four players.”
Google’s (NASDAQ:GOOG) agreement follows Oracle’s (NYSE:ORCL) deal with the government last week, which included “substantial discounts” on its broader cloud computing contracts, including a 75% discount on some software contracts for a limited period.
Google’s cloud contract is probably going “to land in a similar spot.” the official said. A deal is expected to be finalized within weeks.
Amazon Web Services and Microsoft’s Azure are anticipated to follow similar deals, but the discussions are not as progressed as those with Google, the report added.
This move is part of a broader initiative, led by the Department of Government Efficiency (DOGE) to cut expenditures across federal agencies.
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