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119-hr-3434119th CongressWALLET

Protecting AI and Cloud Competition in Defense Act of 2025

Sponsored By: Representative Fallon, Pat [R-TX-4]

Introduced

Summary

Ensures competition and government control over AI-related cloud and model procurement at the Department of Defense. It would set clear definitions, force competitive awards, protect government data rights, and require public reporting on market concentration and exemptions.

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  • Would require the Secretary of Defense to run competitive procurements for cloud computing, data infrastructure, and foundation model solutions. It prioritizes multi-cloud technology and gives the government exclusive rights to access and use all government data.
  • Sets who must comply by defining key terms. A "covered provider" is any cloud, data infrastructure, or foundation model provider with at least $50 million in DoD contracts in any of the prior five fiscal years. A "foundation model" includes models with about 1 billion parameters or models that could pose serious national-security, economic, public-health, or safety risks.
  • Requires updates to the Defense Federal Acquisition Regulation Supplement to bar vendors from using government-furnished data to train commercial products without authorization and to protect stored government data. Violations can bring fines or contract termination, narrow national-security exemptions must be notified in writing, and the DoD must report to congressional defense committees starting Jan 15, 2027 with annual public summaries for four years.

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 1 benefits, 0 costs, 1 mixed.

DoD AI and Cloud Rules for Vendors

If enacted, this bill would set new rules for companies that sell cloud, data, or AI models to the Defense Department. It would define which firms are covered, including firms with at least $50 million in DoD contracts in any one of the past five years and "foundation models" with at least 1,000,000,000 parameters. The DoD would be required to run competitive awards, keep exclusive access to government data, favor modular and multi-cloud designs, and reduce barriers for small or nontraditional firms. Vendors would face new data and IP rules, limits on using government-furnished data to train commercial products without permission, updated DFARS protections, and penalties for violations. Acquisition officials could grant national-security exemptions but must notify the Chief Digital and Artificial Intelligence Officer with specifics.

Annual DoD AI Competition Report

This bill would require the Chairman of the Joint Chiefs, with the acquisition official, to report to Congress on AI competition by January 15, 2027, and each year for four more years. The report must assess competition, innovation, barriers to entry, and market concentration. It must list any national-security exemptions granted under the bill, give recommendations, and the DoD would post a public version online. The DoD would also provide the full report on request at no cost to the Department.

Sponsors & CoSponsors

Sponsor

Fallon, Pat [R-TX-4]

TX • R

Cosponsors

  • Rep. Jacobs, Sara [D-CA-51]

    CA • D

    Sponsored 5/15/2025

  • Rep. Deluzio, Christopher R. [D-PA-17]

    PA • D

    Sponsored 5/15/2025

  • Rep. Vindman, Eugene Simon [D-VA-7]

    VA • D

    Sponsored 8/15/2025

Roll Call Votes

No roll call votes available for this bill.

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