Protecting AI and Cloud Competition in Defense Act of 2024

This bill sets requirements for how the Department of Defense buys cloud computing, data infrastructure, and foundation model (advanced AI) services, aiming to promote competition and protect government data. It defines key terms like cloud provider, data infrastructure provider, and foundation model provider, and applies rules to any such provider that has had contracts with the Department totaling at least $50 million in any of the previous five fiscal years.

Sec. 2, Ensuring competition in AI procurement: The Secretary of Defense must include in contracts with these providers requirements to promote security, resiliency, and competition through a competitive award process for each procurement, ensure the government keeps exclusive rights to access and use all government data, and ensure the competitive process prioritizes government intellectual property and data rights, security, interoperability, and auditability, includes modular open systems approaches, and considers multi-cloud technology where feasible.

Sec. 2, Data training and use protection: The Secretary must direct the Chief Digital and Artificial Intelligence Office to update Defense Federal Acquisition Regulation Supplement rules to ensure government-furnished data for AI products and services is not disclosed or used without authorization, is protected from other data on vendor systems, and violations are subject to penalties including fines and contract termination. Component acquisition executives may issue exemptions if not inconsistent with national security and after notifying the Chief Digital and Artificial Intelligence Officer.

Sec. 2, Reporting: By January 15, 2026, and annually for four years, the Chairman of the Joint Chiefs of Staff, with the Under Secretary of Defense for Acquisition and Sustainment, must report to congressional defense committees on competition, innovation, barriers to entry, and market power concentrations in the AI space, with recommendations. The report must be made publicly available on a Department of Defense website and transmitted upon request at no cost.