The move comes almost immediately after OpenAI offered its ChatGPT enterprise for all US federal government workers for $1 per year per agency, as the firms look to undercut each other - and presumably create a reliance within the public sector, which is likely to use AI tools to help streamline their work and save money on admin costs.

Anthropic’s escalation – a response to OpenAI’s attempt to undercut the competition – is a strategic play meant to broaden the company’s foothold in federal AI usage.

Amazon.com-backed Anthropic said on Tuesday it will offer its Claude AI model to the U.S. government for $1, joining a growing list of artificial intelligence startups proposing lucrative deals to win federal contracts.