U.S. Senator Eric Schmitt (R-MO) has reintroduced the bipartisan Protecting AI and Cloud Competition in Defense Act. The bill aims to ensure that the Department of Defense (DoD) prioritizes competition and resiliency in its procurement of artificial intelligence (AI) and cloud computing tools. The legislation seeks to provide opportunities for small and medium-sized start-ups within the DoD’s ecosystem.
“The Department of Defense’s procurement process must encourage competition instead of allowing a select group of companies to dominate the awards process,” stated Senator Schmitt. “We must move away from policies that create risk concentration and stifle innovation.”
Senator Schmitt collaborated with Senator Elizabeth Warren (D-MA) on this initiative, which follows new White House guidelines on AI procurement. These guidelines urge federal agencies to avoid vendor lock-in and protect government data from being used to train commercial AI models.
Initially introduced in December 2024, the Protecting AI and Cloud Competition in Defense Act addresses concerns over market dominance by a few large companies. The DoD has already allocated $9 billion in contracts for its cloud computing network and requested an additional $1.8 billion for AI programs for fiscal year 2025.
The bill mandates several requirements for DoD contracts with AI and cloud computing companies earning $50 million or more annually from DoD:
– A competitive award process.
– Exclusive government rights to access and use all government data.
– Mitigation of entry barriers for small businesses and nontraditional contractors.
– Consideration of multi-cloud technology unless it is infeasible or poses national security risks.
Additionally, the Chief Digital and Artificial Intelligence Office (CDAO) at DoD is tasked with ensuring that government data used in AI product development is not disclosed without authorization. Furthermore, if stored on vendor systems, such data must have appropriate protections.
The legislation also requires a report every four years on competition, innovation, barriers to entry, and market power concentration in the AI sector, including recommendations for legislative and administrative action.
