A growing reliance on artificial intelligence and proprietary software is leaving local governments increasingly dependent on major technology vendors, according to a report by Fresnoland. During a Fresno City Council budget hearing, City Manager Georgeanne White said the city has become "captive" to software companies because essential government systems now rely on subscription-based platforms and continuously updated services. Once a city adopts these technologies, switching providers becomes difficult, creating long-term dependence on private vendors.
The discussion was prompted by concerns over the rising cost of AI. Councilmember Miguel Arias questioned how much the city was spending on AI technologies, but officials acknowledged that those costs are not fully tracked or readily available. The report revealed that Fresno employees use numerous AI-enabled tools, including Microsoft Copilot, Madison AI for drafting internal reports, AI-powered transcription software, Salesforce AI features, Claude AI, and AI integrated into Axon's police technology. However, the city lacks a comprehensive accounting of AI-related expenditures.
The article also highlights governance challenges. Fresno currently has no formal AI policy, although officials say internal guidelines exist and are expected to be formalized. The city has already experienced issues related to AI misuse, including an incident in which outside legal counsel reportedly submitted an AI-generated citation that did not exist. Officials also noted that widespread employee use of ChatGPT prompted OpenAI to require either an enterprise subscription or restricted access, leading the city to block ChatGPT on municipal systems and encourage staff to use Microsoft Copilot instead.
The report concludes that Fresno's experience reflects a broader challenge facing governments worldwide. As AI becomes embedded in essential public services, municipalities must balance the productivity benefits of advanced software with concerns over vendor lock-in, rising subscription costs, data governance, and responsible AI use. The article suggests that while AI adoption may feel inevitable, governments need stronger procurement strategies, transparent cost tracking, and clear governance policies to ensure they remain in control of the technologies on which public services increasingly depend.
