I 
119TH CONGRESS 
1ST SESSION H. R. 3434 
To provide for certain requirements relating to cloud, data infrastructure, 
and foundation model procurement. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 15, 2025 
Mr. FALLON (for himself, Ms. JACOBS, and Mr. DELUZIO) introduced the 
following bill; which was referred to the Committee on Armed Services 
A BILL 
To provide for certain requirements relating to cloud, data 
infrastructure, and foundation model procurement. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Protecting AI and 
Cloud Competition in Defense Act of 2025’’. 
SEC. 2. ENSURING COMPETITION IN ARTIFICIAL INTEL-
LIGENCE PROCUREMENT. 
(a) DEFINITIONS.—In this section: 
(1) ARTIFICIAL INTELLIGENCE; AI.—The terms 
‘‘artificial intelligence’’ and ‘‘AI’’ have the meaning 
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given the term ‘‘artificial intelligence’’ in section 
5002 of the National Artificial Intelligence Initiative 
Act of 2020 (15 U.S.C. 9401). 
(2) CLOUD
COMPUTING.—The term ‘‘cloud 
computing’’ has the meaning given the term in Spe-
cial Publication 800–145 of the National Institute of 
Standards and Technology, or any successor docu-
ment. 
(3) CLOUD PROVIDER.—The term ‘‘cloud pro-
vider’’ means any company engaged in the provision, 
sale, or licensing of cloud computing to customers, 
including individuals and businesses. 
(4) CONGRESSIONAL DEFENSE COMMITTEES.— 
The term ‘‘congressional defense committees’’ has 
the meaning given the term in section 101(a) of title 
10, United States Code. 
(5) COVERED PROVIDER.—The term ‘‘covered 
provider’’ means any cloud provider, data infrastruc-
ture provider, or foundation model provider that has 
entered into contracts with the Department of De-
fense totaling at least $50,000,000 in any of the 5 
previous fiscal years. 
(6) DATA INFRASTRUCTURE.—The term ‘‘data 
infrastructure’’ means the underlying computer, net-
work, and software systems that enable the collec-
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tion, storage, processing, and analysis of data, in-
cluding the ability to record, transmit, transform, 
categorize, integrate, and otherwise process data 
generated by digital data systems. 
(7) DATA
INFRASTRUCTURE
PROVIDER.—The 
term ‘‘data infrastructure provider’’ means any com-
pany engaged in the provision, sale, or licensing of 
data infrastructure to customers, including individ-
uals and businesses. 
(8) FOUNDATION MODEL.—The term ‘‘founda-
tion model’’ means an artificial intelligence model 
that— 
(A)(i) generally uses self-supervision; 
(ii) contains at least 1,000,000,000 param-
eters; and 
(iii) is applicable across a wide range of 
contexts; or 
(B) exhibits, or could be easily modified to 
exhibit, high levels of performance at tasks that 
pose a serious risk to security, national eco-
nomic security, national public health, or safety. 
(9) FOUNDATION MODEL PROVIDER.—The term 
‘‘foundation model provider’’ means any company 
engaged in the provision, sale, or licensing of foun-
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dation models to customers, including individuals 
and businesses. 
(10) MULTI-CLOUD
TECHNOLOGY.—The term 
‘‘multi-cloud technology’’ means architecture and 
services that allow for data, application, and pro-
gram portability, usability, and interoperability be-
tween infrastructure, platforms, and hosted applica-
tions of multiple cloud providers and between public, 
private, and edge cloud environments in a manner 
that securely delivers operational and management 
consistency, comprehensive visibility, and resiliency. 
(b) CLOUD, DATA INFRASTRUCTURE, AND FOUNDA-
TION MODEL PROCUREMENT REQUIREMENTS.—The Sec-
retary of Defense shall, in contracting provisions with 
cloud providers, foundation model providers, and data in-
frastructure providers— 
(1) promote security, resiliency, and competi-
tion in the procurement of such solutions by requir-
ing a competitive award process for each procure-
ment of cloud computing, data infrastructure, or 
foundation model solutions; 
(2) ensure that the Government maintains ex-
clusive rights to access and use of all Government 
data; and 
(3) ensure that the competitive process— 
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(A) prioritizes the appropriate role for the 
Government with respect to intellectual prop-
erty and data rights and security, interoper-
ability, and auditability requirements; 
(B) includes modular open systems ap-
proaches and appropriate work allocation and 
technical boundaries; 
(C) mitigates barriers to entry faced by 
small businesses and nontraditional contractors; 
and 
(D) prioritizes multi-cloud technology un-
less doing so is infeasible or presents a substan-
tial danger to national security. 
(c) DATA TRAINING AND USE PROTECTION.—The 
Secretary of Defense shall direct the Chief Digital and Ar-
tificial Intelligence Office to update or promulgate provi-
sions of the Defense Federal Acquisition Regulation Sup-
plement (DFARS) to ensure that— 
(1) Government-furnished data, provided for 
purposes of development and operation of AI prod-
ucts and services to the Department of Defense, is 
not disclosed or used without proper authorization 
by the Department of Defense, including that such 
data cannot be used to train or improve the 
functionality of commercial products offered by a 
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covered provider without express authorization by 
the Department of Defense; 
(2) Government-furnished data stored on ven-
dor systems, provided for purposes of development 
and operation of AI products and services to the De-
partment of Defense, is appropriately protected from 
other data on such systems, and is treated in ac-
cordance with Department of Defense data decrees 
and Creating Data Advantage (Open DAGIR) prin-
ciples; 
(3) violation of these provisions shall be subject 
to specific penalties, including fines and contract ter-
mination; and 
(4) component acquisition executives may issue 
exemptions upon— 
(A) determining that issuing an exemption 
is necessary for national security; and 
(B) notifying the Chief Digital and Artifi-
cial Intelligence Officer of the specific provi-
sions exempted, the vendor and program being 
issued the exemption, and the justification for 
the exemption. 
(d) REPORTING.— 
(1) IN GENERAL.—Not later than January 15, 
2027, and annually thereafter for four years, the 
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Chairman of the Joint Chiefs of Staff, in coordina-
tion with the Under Secretary of Defense for Acqui-
sition and Sustainment, shall submit to the congres-
sional defense committees a report assessing the 
competition, innovation, barriers to entry, and con-
centrations of market power or market share in the 
AI space for each period covered by the report. The 
report shall also include a list of the exemptions 
granted under subsection (c)(4)(A), including the 
date and purpose of the exemption. The report shall 
also include recommendations of appropriate legisla-
tive and administrative action. 
(2) PUBLICATION.—The Secretary of Defense, 
acting through the Assistant to the Secretary of De-
fense for Public Affairs, shall ensure that the report 
is made available to the public by— 
(A) posting a publicly releasable version of 
the report on a website of the Department of 
Defense; and 
(B) upon request, transmitting the report 
by other means, as long as such transmission is 
at no cost to the Department. 
Æ 
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