Anthropic and Gov. Newsom forge deal allowing California government to use Claude at half price

California state agencies and local governments will gain access to Anthropic's Claude chatbot at a discounted price under an agreement announced Monday, as the state pushes to accelerate artificial intelligence use in public services while the company remains locked in a separate dispute with federal defense officials [1]. The deal provides all California government entities with Claude, along with training and support from Anthropic, according to a statement from Governor Gavin Newsom's office [1]. State employees will use the AI tool to draft documents and analyze information [1]. The price for government access is set at half the standard rate [1]. "AI should not replace the human work of government; it should help our workers move faster, solve problems more effectively, and deliver better results for Californians," Newsom said [1]. The agreement follows a March executive order from Newsom that directed state agencies to accelerate AI adoption while maintaining safety standards [1]. "While others in Washington are designing policy and creating contracts in the shadow of misuse, we're focused on doing this the right way," Newsom said at the time [1]. Anthropic, founded in 2021 by former OpenAI employees and headquartered in San Francisco, develops the Claude series of large language models with a stated focus on AI safety [7]. The company trains its models using a technique called "constitutional AI" designed to improve ethical and legal compliance [8]. The state-level partnership contrasts with Anthropic's strained relationship with the U.S. Department of Defense. Earlier this year, the company clashed with defense officials over a contract that would have permitted deployment of Claude for any lawful use [1]. Anthropic sought to prohibit use of its technology for mass domestic surveillance or fully autonomous weapons without human oversight [1]. Defense Secretary Pete Hegseth refused those terms, and the Pentagon instead signed a deal with OpenAI [1]. The Department of Defense subsequently designated Anthropic a "supply chain risk," barring U.S. private military contractors and suppliers from doing business with the firm [8]. A federal judge issued a temporary injunction against that designation on March 26, 2026 [8]. California's Chief Information Officer Chris Given told POLITICO that the federal supply-chain risk designation "just didn't come up" during the state's contract negotiations with Anthropic [1]. Anthropic has also developed the Model Context Protocol, an open standard introduced in November 2024 that standardizes how AI systems integrate with external tools and data sources [9]. The protocol has since been adopted by OpenAI and Google DeepMind [9].