Microsoft has struck a major deal with the United States General Services Administration to deliver $3.1 billion in annual savings on its cloud services, deepening the Trump administration’s effort to slash costs across federal agencies.

The discounted pricing, available through September 2026, covers Microsoft Office productivity subscriptions, Azure cloud infrastructure, Dynamics 365 business applications, and Sentinel cybersecurity tools.

Federal workers with Microsoft 365 G5 licenses will also receive one year of free access to the company’s Copilot AI assistant, CNBC.

Microsoft projects the agreement will generate more than $6 billion in savings over three years. Agencies must purchase through the GSA to qualify for the lower prices.

The move aligns with the GSA’s “OneGov” strategy, which consolidates federal technology spending to secure volume discounts. Adobe, Amazon, Google, and Salesforce have already committed to similar pricing deals.

The commissioner of the GSA’s Federal Acquisition Service and a former KKR executive, Josh Gruenbaum, said agencies can transition easily to the new rates.

He noted that the GSA oversees about $110 billion in annual spending on goods and services, including roughly $80 billion for IT.

The agency is also moving to absorb procurement for NASA and the National Institutes of Health under a March executive order from President Trump. Microsoft’s U.S. government revenue is estimated in the mid- to high-single-digit billions annually, according to Gruenbaum.

“It’s no surprise that Microsoft is one of the most critical partners for the federal government in terms of its software and the tooling that we use around both the civilian side and the defense side,” Gruenbaum said.