I'm not aware of any government handouts for tech companies adding AI to their products, can you give an example, please?
The government does procure services from private firms, this isn't new or special.
Just because it benefits them doesn't mean it's not a handout, especially when said money could be used elsewhere for purposes that actually benefit everyone and not a dozen people living in SF.
This is a government entity procuring a product they need from a private entity.
You can dislike it, but it's not a handout. Words have meaning.