Amazon Web Services Gives The Trump Admin $1 Billion Coupon

Amazon Web Services is giving the Trump administration a $1 billion coupon to use their services for the federal government’s digital transformation and artificial intelligence capacity. On Thursday, the General Services Administration announced a sweeping “OneGov” agreement with Amazon Web Services that would yield up to $1 billion in cost savings for federal agencies shifting to cloud services.

The deal, set to run through 2028, is being framed by administration officials as a cornerstone of both the administration’s AI strategy and its broader effort to modernize government IT systems.

The agreement is expected to accelerate cloud adoption across dozens of civilian agencies, support workforce training in AI tools, and establish the technical infrastructure needed to power large language models and machine learning applications. It’s the second major OneGov cloud services deal since President Donald Trump’s executive order on procurement consolidation earlier this year.

Federal Acquisition Service Commissioner and DOGE staffer Josh Gruenbaum, who has played a leading role in negotiating the deal, called it “a foundational piece to help implement President Trump’s AI Action Plan.”

The deal provides $1 billion in credits that federal agencies can draw down on for core AWS cloud services — which will account for the majority of the $1 billion in value — as well as helping agencies shift from on-premises infrastructure to the cloud and training resources for federal employees.

The AWS deal is not exclusive. Similar OneGov agreements are in the works with other major cloud providers, including Microsoft and Google, said a senior administration official familiar with the conversations granted anonymity to discuss them. Oracle also recently signed a deal giving government agencies a 75% discount on Oracle technology.

“We’re just getting started,” the senior GSA official said. “This is a first-of-its-kind agreement, and there’s a lot more to come both in the cloud space and across other high-impact industries.”

For the administration, it’s a chance to solidify Trump’s AI legacy by laying the groundwork for a long-term transformation of government operations.

“Through this new agreement with AWS, federal agencies will be able to enhance delivery of critical services, leverage cloud and advanced AI technologies, and dramatically reduce costs,” said GSA acting Administrator Michael Rigas.

For AWS, the partnership deepens its presence in the federal government and provides access to a huge addressable market of $80 to $100 billion dollars in moving government IT infrastructure still stored on their premises to third party cloud-providers.

“This landmark agreement marks a significant milestone in the large-scale digital transformation of government services,” said AWS CEO Matt Garman. “As federal agencies adopt advanced technologies like artificial intelligence and machine learning, AWS is positioned to not only help them achieve immediate operational efficiencies, but also to build the foundation for a more secure and innovative government of tomorrow.”

A notable feature of the deal is its attempt to bypass value-added resellers, encouraging direct contracts between agencies and AWS.

“There is a twofold benefit,” Gruenbaum explained. “First, you’re building a direct relationship with the provider, so you can actually pick up the phone and innovate. Second, you save taxpayer dollars by avoiding the 5-7 percent lift in costs that comes from unnecessary middlemen.”

The Amazon Web Services partnership includes built-in incentives to favor direct procurement over system integrators, a structural design that reflects the Trump administration’s broader vision of creating “market tension within the federal government itself” by wielding centralized purchasing power.

“We wanted to have a deep partnership that has durability and horizon to it, they jumped at it and they set this deal to basically live through this administration,” Gruenbaum said.