Protecting AI and Cloud Competition in Defense Act of 2025

This bill sets requirements for how the Department of Defense buys cloud computing, data infrastructure, and foundation model services, aiming to promote competition, protect government data, and ensure security and interoperability. It defines key terms and imposes rules on contractors that have received at least $50 million from the Department in the past five years.

Sec. 2, Ensuring competition in AI procurement: The Secretary of Defense must require a competitive award process for each procurement of cloud, data infrastructure, or foundation model solutions; 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, modular open systems, and multi-cloud technology unless infeasible or a national security risk. It also requires mitigating barriers for small businesses and nontraditional contractors.

Sec. 2, Data training and use protection: The Secretary must direct the Chief Digital and Artificial Intelligence Office to update the Defense Federal Acquisition Regulation Supplement to ensure government-furnished data for AI products and services is not disclosed or used without authorization, cannot be used to train commercial products without express permission, is protected from other data on vendor systems, and that violations are subject to penalties including fines and contract termination. Component acquisition executives may issue exemptions for national security reasons after notifying 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 submit a report to Congress assessing competition, innovation, barriers to entry, and market concentration in AI, including a list of exemptions granted and recommendations for legislative or administrative action. The Secretary must make a publicly releasable version available on a Department website and transmit it upon request at no cost.