Amazon Gives Trump's Government a Billion-Dollar Discount

Donald Trump’s tariffs might be slowing trade with other nations, but the favor-trading between Big Tech and the Trump administration is going strong. According to a report from Reuters, Amazon Web Services is giving the federal government a $1 billion discount in its cloud computing services, including adoption, modernization, and training programs.

Sounds like a pretty sweet deal if you can get it, and the Trump administration just keeps getting it. Last month, the US General Services Administration announced a similar deal with Oracle, another cloud computing provider, that included a “75% discount” on the company’s programs and platforms. And just yesterday, OpenAI said that it will offer its ChatGPT Enterprise product to U.S. federal agencies for just $1—significantly cheaper than the reported cost of the service for most companies, which have to pay upwards of $60 per user per month with a minimum of 150 users on a minimum of a 12-month contract.

So what is motivating these companies to offer their products and services at a fractional rate? After all, government contracts are supposed to be so lucrative for these firms because the government loves to overpay.

Well, there’s the straightforward answer: Sucking up to power. Amazon has been at it for months now, doing everything from shelling out $40 million for a documentary about Melania Trump (talk about an overpay) to going out of its way to get the licensing rights to The Apprentice on its Prime Video streaming platform. It hasn’t gotten Bezos and his boys much so far (Trump got Amazon’s plans to display tariff costs on product prices scrapped by blowing up Jeff’s phone), but they also know that being on Trump’s bad side costs even more. The company claimed to have lost out on $10 billion in Pentagon contracts during Trump’s first term simply because the president held a grudge.

And then there’s the slightly less straightforward possibility: sucking up data. It is cliché at this stage to say “If you’re not paying for the product, you are the product,” but there may be some relevance to the truism here. These companies are data hungry, especially as they seek sources that they can feed to their AI models. The government happens to have a shit ton of data—and the kind of data that they desperately want, because it is verified, unique, and provides detailed insight into human behavior over many years.

We know that data is clearly up for grabs. One just needs to look at the work of Elon Musk’s team at the Department of Government Efficiency, which seemed to almost entirely act as a data extraction service, to recognize that. So perhaps these companies have found their way to get their hands on something more valuable than a simple contract. Maybe they’ve found a way to tap the wellspring of information the government is sitting on, and all it costs is a rounding error on their books. Just a theory.