# GSA Extends AI Services to Local Governments

The U.S. General Services Administration (GSA) has extended its multiyear discounted AI services agreement with OpenAI to now include local, state, and tribal governments, effective October 1, 2026, through 2028. This extension removes the previous $15 monthly licensing fee and offers a 50% discount off standard commercial pricing, significantly broadening access to advanced AI tools such as ChatGPT models across multiple government levels. This initiative supports government cybersecurity efforts and creates new procurement opportunities for AI service providers and contractors working with diverse government entities.

- **Why this matters:** Local, state, and tribal governments can now procure AI services at substantially reduced costs, enabling wider adoption of AI technologies in public sector operations.
- The removal of licensing fees and discounted pricing signals increased federal support for AI integration in government workflows and cybersecurity.
- AI vendors and contractors should evaluate opportunities to expand their offerings and partnerships with government clients at all levels.
- Procurement professionals should prepare for increased demand and consider how to incorporate AI services into their technology acquisition strategies.

**Jurisdictions:** federal
**Industries:** Information Technology
**Topics:** Artificial Intelligence
**Published:** September 21, 2026

### Government Entities
- U.S. General Services Administration (GSA)

### Vendors
- OpenAI (prime contractor)

### Sources
- [OpenAI, GSA extend discounted AI services to local governments | Smart Cities Dive](https://www.smartcitiesdive.com/news/openai-gsa-extend-discounted-ai-services-to-local-governments/830907) - Smart Cities Dive