What a complete nonstory. Even at my 50 person startup we have an IT policy that requires employees to only use approved AI tools. For a government the only real news is that there wasn't already something in place enforcing this.
Same at my work. We have access to our own LLM tools that are backed by OAI/Claude depending on user pref, but with data retention/training contracts in place so they don't keep/train on our internal data.