by: Sarah Clein, Leadership Connect
Federal AI policy is shifting under the Trump administration, with an emphasis on innovation, transparency, and competition. On July 17, 2025, the administration released its AI Action Plan, outlining a government-wide approach to accelerating AI adoption while revising existing oversight and procurement frameworks. Leadership Connect breaks down the latest policy changes and provides strategic recommendations to help agencies and contractors align their operations with evolving federal priorities.
Recommended Actions
For Agencies:
- Publish formal AI policies by 12/31/25: Agencies must meet OMB’s new governance requirements under M-25-21.
- Ensure AI is neutral, explainable, and accountable: EO 14319 requires clear safeguards and transparent functionality.
- Prioritize U.S.-built systems: EO 14320 and OMB procurement memos make domestic sourcing a top priority.
- Streamline data center permitting: EO 14318 directs faster environmental review and approval for AI-related infrastructure.
For Contractors:
- Align offerings with neutrality and transparency standards: Contractors like Booz Allen, Microsoft, and Palantir must be ready for procurement updates tied to EO 14319.
- Prove compliance with new procurement rules: OMB M-25-22 requires vendors to safeguard government data and avoid proprietary lock-in.
- Position for export opportunities: EO 14320 opens the door to U.S.-backed international deployment of AI systems. Contractors should target agencies leading this effort and relevant industry consortia.
- Highlight integration readiness: The SPEED Act and OMB memos both reward firms that can quickly plug into government infrastructure.
Recent Executive Orders Affecting AI Policy
Executive Order 14179 – Removing Barriers to American Leadership in Artificial Intelligence
Signed January 23, 2025
This order repositions federal AI policy around accelerated deployment and broader adoption, replacing the more cautious approach outlined in Executive Order 14110.
- EO 14179 formally revokes EO 14110 and establishes an adjustment from risk-averse implementation to a development-focused strategy across all federal agencies.
- Federal departments are now responsible for reviewing and removing internal rules, policies, or procedures that create administrative delays in AI implementation.
- The order also directs a revision of Office of Management and Budget (OMB) M-24-10 and M-24-18. Previously focused on AI strategic oversight and acquisition policy, these documents have now been updated to align with shifting federal priorities.
Executive Order 14318: Accelerating Federal Permitting of Data Center Infrastructure
Signed July 23, 2025
This order instructs federal agencies to improve the efficiency of permitting processes related to infrastructure that supports AI and computing systems.
- Federal agencies must streamline permitting procedures for data centers and related infrastructure to support timely deployment.
- Where appropriate under existing laws, environmental reviews may be expedited or addressed through categorical exclusions.
- Agencies are encouraged to collaborate with state and local governments to reduce duplication in permitting and review processes.
- The order identifies infrastructure supporting computing, cloud services, and AI system deployment as a priority for permitting improvements.
Executive Order 14319: Preventing Woke AI in the Federal Government
Signed July 23, 2025
This order sets requirements for federal use of AI systems, emphasizing transparency and accountability, while deprioritizing DEI-related elements in AI model design.
- Federal agencies are directed to adopt AI systems that are designed to operate in a neutral, objective manner.
- AI systems should be able to identify and communicate when input data is incomplete or disputed.
- The Office of Management and Budget will issue implementation guidance within 120 days of the order’s publication.
- Agencies are required to update procurement contracts to ensure alignment with these standards and may take corrective action when necessary.
Executive Order 14320: Promoting the Export of the American AI Technology Stack
Signed July 23, 2025
This order establishes a federal initiative to support the international deployment of AI technology systems developed in the United States.
- A new program will facilitate the export of U.S.-based AI technology stacks that integrate hardware, software, and secure infrastructure.
- Industry-led partnerships may submit proposals for export packages, which will be considered for federal support.
- Selected proposals will receive coordinated assistance through economic, diplomatic, and trade-related federal resources.
- Exported AI technologies must comply with all applicable U.S. laws governing trade, security, and end-user controls.
Key Policy Developments
OMB AI Memo M-25-21: Internal AI Use and Governance
Revised April 3, 2025
- Requires each agency to appoint a Chief AI Officer to lead internal coordination and establish AI governance structures.
- Calls for agencies to publish a formal AI strategy that includes risk management plans, particularly for high-impact systems.
- Encourages transparency in AI use and recommends prioritizing tools developed in the United States.
OMB AI Memo M-25-22: AI Procurement Guidance
Revised April 3, 2025
- Promotes open competition in AI contracting and discourages reliance on a single vendor or proprietary systems.
- Prohibits vendors from using government data for training AI models without explicit permission and includes data protection requirements.
- Supports transparency in AI tools used in federal contracts and provides access to shared procurement resources and best practices.
In parallel to the updated executive orders and OMB AI memos, Congress has advanced the SPEED Act (Streamlining Procurement for Effective Execution and Delivery), a bipartisan bill that aims to modernize how the Department of Defense acquires emerging technologies, including AI. While not yet signed into law, the Act:
- Encourages broader use of flexible procurement tools like Other Transaction Authority (OTA) and Commercial Solutions Openings (CSOs)
- Pushes for faster award cycles and reductions in bureaucratic overhead
- Incentivizes acquisition of commercially available, integration-ready technologies
- Reinforces cultural shifts in government acquisition toward agility, responsiveness, and measured risk-taking
On July 15, 2025, the House Committee on Armed Services convened to markup the National Defense Authorization Act (NDAA) for the Fiscal Year 2026. Among the legislative items discussed during the session was the SPEED Act, which featured prominently in the committee’s deliberations. You can view the hearing transcript and a summary with the Leadership Connect Hearings Hub links below:
Quotes from the Experts
Associate Director of Analysis & Andrew W. Marshall Fellow
Center for Security and Emerging Technology (CSET)
When asked in an interview with Leadership Connect whether the shift from Biden-era AI policies to the Trump administration’s recent changes marked a drastic change, Daniels responded:
“The Trump administration has rhetorically very much emphasized pulling the guardrails off when it comes to AI safety. But in reality, if you look at the executive-level policies under the Biden administration, a lot of what they were asking AI companies to do were to make voluntary commitments to safety. There wasn’t necessarily the power of legislation. They weren’t regulations in the sense of legally binding obligations for the companies to commit to. There was some language in executive orders and agreements they signed with companies that were related to letting the government know about risks from powerful models, but there was nothing necessarily legally binding. In that sense, there’s maybe a little more continuity than you might think from the perspective of the casual observer. In terms of the drivers of AI policy in the U.S., there are a few things that remain pretty essential. AI is a driver of national competitiveness and national security; that’s pretty consistent even though the tone is a little different. The emphasis on building out safety infrastructure is something that AI policy researchers and people in the government are interested in facilitating across administrations. So in that sense, there are certainly some similarities to policies under the previous administration.”
Deputy Chief Information Officer for Architecture, Engineering, Technology & Innovation
U.S. Department of Energy (DOE)
When asked during Leadership Connect’s Public Sector AI: Transforming Data into Actionable Insights webinar about what is most relevant to her in the recent AI policy changes and how they are driving internal conversations, Carper responded:
“We’re looking at [EO 14318: Accelerating Federal Permitting of Data Center Infrastructure], because we are in the process of getting data centers. The permitting process is one of those very long ones, so we have developed a tool around decreasing the timeline of using permitting, but also ensuring that the environmental impacts are noted. And then lastly, one of my other hats, is the data aspects of how we’re incorporating and ensuring that we’re following the Evidence Act as we’re implementing some of our AI tools. We definitely got a lot from the executive orders that we’re focusing on over the next few months, and some policies coming out as well.”
Recent AI policy changes signal a push toward operational efficiency, technological modernization, and performance oversight in government. From executive orders to procurement reform and new legislative initiatives, the direction is clear: agencies are being told to adopt AI faster, buy commercially, and ensure that tools are safe, explainable, and aligned with national interests. For contractors and agencies, these changes present both new opportunities and new responsibilities in shaping the future of government AI use.
For more insights on government technology and policy, stay connected with Leadership Connect.
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