Protecting AI and Cloud Competition in Defense Act of 2025

This bill requires the Department of Defense to promote competition and security when buying cloud computing, data infrastructure, and foundation model services. It also protects government data used for AI and mandates reports on AI market competition.

Sec. 2, Ensuring competition in AI procurement: The Secretary of Defense must require a competitive award process for each purchase of cloud, data infrastructure, or foundation model solutions; ensure the government keeps exclusive rights to access and use all government data; and prioritize multi-cloud technology unless infeasible or a national security risk. The competitive process must also consider intellectual property, data rights, security, interoperability, modular open systems, and reduce barriers for small businesses and nontraditional contractors.

Sec. 2, Data training and use protection: The Secretary must update the Defense Federal Acquisition Regulation Supplement to ensure government-furnished data for AI is not disclosed or used without authorization, including not being used to train commercial products; is protected from other data on vendor systems; violations face penalties like fines and contract termination; and exemptions can be issued for national security with notification to the Chief Digital and Artificial Intelligence Officer.

Sec. 2, Reporting: By January 15, 2027, and annually for four years, the Chairman of the Joint Chiefs of Staff must report to Congress on AI competition, innovation, barriers to entry, and market concentration, including a list of exemptions granted. The report must be made public on a Defense Department website and transmitted upon request at no cost.