ICYMI: At Hearing, Warren Secures Commitment From Defense Nominee to Support AI Competition and Innovation in Defense Contracting
Cadenazzi “thrilled” to work with Warren to stop anticompetitive practices in AI industry
Senator Warren plans to reintroduce the bipartisan Protecting AI and Cloud Competition in Defense Act
Washington, D.C. – At a hearing of the Senate Armed Services Committee, U.S. Senator Elizabeth Warren (D-Mass.) secured a commitment from Mr. Michael P. Cadenazzi, nominee to be the next Assistant Secretary of Defense for Industrial Base Policy, to stop anticompetitive practices by Big Tech that could threaten our national security.
Senator Warren explained that federal agencies should benefit from innovation in the artificial intelligence (AI) sector, but instead, a few Big Tech companies could lock the government into expensive, anticompetitive products. She highlighted lessons from recent White House guidance on the federal acquisition of artificial intelligence (AI) tools, explaining that the guidance could provide valuable takeaways to make sure Big Tech companies do not lock the government into expensive, anticompetitive products.
This month, the Office of Management and Budget (OMB) issued a memo on “Driving Efficient Acquisition of Artificial Intelligence in Government.” The memo laid out guidance on proper practices, such as vendor lock-in protections and prohibiting the use of classified agency data.
Though the guidance does not apply to the Department of Defense (DoD), Mr. Cadenazzi agreed with OMB’s guidance on interoperability and believes “it's a great thing for the [DoD] to secure.” Cadenazzi also said he’d be open to working with Senator Warren to limit contractors from training their commercial tools on government data.
Next week, Senator Warren plans to reintroduce the Protecting AI and Cloud Competition in Defense Act with Senator Eric Schmitt (R-MO.). Senator Warren previously introduced the bipartisan act to ensure that the DoD’s procurement of artificial intelligence (AI) and cloud computing tools prioritizes resiliency and competition, offering meaningful regulation to limit Big Tech monopolies from elbowing out competitors in the AI and cloud computing markets.
“[G]overnment contracts for AI and cloud tools should, one, prevent lock-in and, two, protect government data,” said Senator Warren.
“[A]rtificial intelligence represents the most promising capabilities for transformational productivity and impact of the department. I would be thrilled if confirmed to work with you and Senator Schmidt on this issue,” said Mr. Cadenazzi of the bill reintroduction.
Transcript: Hearing to examine the nominations of Michael Cadenazzi, of Rhode Island, to be an Assistant Secretary of Defense, and Scott Pappano, of Pennsylvania, to be Principal Deputy Administrator, National Nuclear Security Administration
Senate Armed Services Committee
April 29, 2025
Senator Elizabeth Warren: Thank you, Mr. Chairman.
Artificial intelligence presents big opportunities—and big risks—to national security. Federal agencies should benefit from AI innovation, but instead, a few Big Tech companies could lock the government into expensive, anticompetitive products.
I’m working with Senator Schmitt on this, and last month, the Office of Management and Budget published guidance to ensure the government can “benefit from a competitive American AI marketplace.” The guidance doesn’t apply to DoD but is all the more important there given the billions DoD is set to give out in AI and cloud contracts. So today, I’d like to run through some lessons from OMB’s guidance.
Number one: “interoperability.” A Big Tech contractor could build its cloud tool to work only with its own AI—which would trap DoD into paying sky-high prices, potentially for a subpar product. That’s why OMB encouraged agencies to require AI tools to work with other companies’ products.
Mr. Cadenazzi, do you agree that DoD would benefit from interoperability?
Mr. Michael P. Cadenazzi: Senator, I appreciate the question. I'm not familiar with the term “interoperability” as defined in that particular report. But more broadly, in general, yes, it's a great thing for the department to secure.
Senator Warren: Okay, good. I'm going to take that as a yes, that you think the product should be able to work with other products. Work in connection.
Mr. Cadenazzi: In general, more connectivity and flexibility to enable a networked approach is a good thing.
Senator Warren: Good. Okay, we're at the same place then. Let’s do another: data use. The biggest AI contractors can also stomp out competition by training their models on troves of government data, so smaller companies don’t stand a chance. This is a disaster for competition and for data security. Data on the location of our service members or of DoD’s contracts shouldn’t be anywhere near a commercial AI model, for example.
The White House is clear here: it says contractors should not use government data to train publicly or commercially available AI algorithms without an agency’s permission.
So, Mr. Cadenazzi, do you agree it’s important for both competition and data security to limit contractors from training their commercial tools on government data?
Mr. Cadenazzi: Senator, I appreciate the question, and in general, yes, I'd say we want to make sure we're following the law with regard to the application of these tools.
Senator Warren: No, that's not my question. This is not a question of law yet. This is just a question of what we should be doing in our acquisitions at DOD.
Mr. Cadenazzi: Senator, I'm not familiar with the White House's particular guidance on this issue, but as you laid it out, it seems to make sense, and I would be supportive of discussing that with you if confirmed.
Senator Warren: Okay. Look, government contracts for AI and cloud tools should, one, prevent lock-in and, two, protect government data. That’s all we’re talking about here. Senator Schmitt and I have a bipartisan bill to make sure DoD contracts do just that. Next week we will re-introduce the Protecting Cloud and AI Competition in Defense Act to make sure billions in DoD contracts go towards fueling innovation in AI and cloud technology - and not just helping the biggest companies get bigger on the taxpayer’s dime.
Mr. Cadenazzi, will you commit to working with me and Senator Schmitt to stop anticompetitive practices by Big Tech that could threaten our national security?
Mr. Cadenazzi: Senator, artificial intelligence represents the most promising capabilities for transformational productivity and impact of the department. I would be thrilled if confirmed to work with you and Senator Schmidt on this issue.
Senator Warren: That looks good. I look forward to working with Senator Schmidt and with you and all of the members of this committee. I think we could make some real progress here. Thank you, Mr. Chairman.
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