An Indian-origin former US government tech advisor has raised concerns over OpenAI and Anthropic’s recent offer to provide federal workers with access to their AI models for just $1 per agency per year. Sid Ghatak, who served as a tech advisor during the Biden administration, has warned that the real cost of these “$1-a-year deals” could be far higher than they appear.
In an interview with a publication, Ghatak questioned whether the token fee would cover all aspects of AI usage. “What does $1 really mean? Does that mean access to the open model and that compute will be charged incrementally?” he asked.
He further noted that once a model is customised for government use, the cost of training and inference could add up significantly. “So, there are all of those costs in terms of training, and then once you have built the model, does the government have to pay for inference whenever federal workers and contractors use it? Is there another incremental charge?” he added.
Ghatak also highlighted that beyond payments to companies like OpenAI and Google, the government will need to make large investments in consolidating and preparing data for AI. “The government has to be really careful and understand what the fully loaded cost is of these solutions beyond the very attractive zero to $1 charge. These AI models are powerful engines, but they require really fantastic data to run cleanly and produce reliable output. The investment in that is something that needs to be understood,” he explained.
Ghatak served as the General Services Administration (GSA) director from 2020 to 2024, where he helped shape the Biden administration’s 2023 AI executive order and co-authored the government’s AI Maturity Model. He later founded Increase Alpha, an AI-based stock prediction platform.
Meanwhile, OpenAI has been expanding its role in government contracts. In June, the US Department of Defence awarded the company a $200 million contract to develop AI tools for national security.
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