US agency AI costs set to surge as subsidies expire: McKinsey

McKinsey warns US government agencies face sharp AI spending increases as subsidised access—some priced at $1—expires in 2026–27. Federal AI use cases rose 69% to 3,611 in 2025. Enterprise AI bills are rising despite falling per-unit costs, as usage grows faster. McKinsey recommends post-subsidy budget forecasting and flexible contracts.