US HB3434

Requires the Department of Defense to use competitive award processes for all cloud computing, data infrastructure, and foundation model procurements, prioritizing multi-cloud technology unless infeasible or a national security risk

Defines "covered providers" as cloud, data infrastructure, or foundation model companies with DoD contracts totaling at least $50,000,000 in any of the previous 5 fiscal years

Prohibits contractors from using government-furnished data to train or improve commercial products without express DoD authorization, with violations subject to fines and contract termination

Directs the Chief Digital and Artificial Intelligence Office to update DFARS regulations to protect government data and ensure compliance with DoD data decrees and Open DAGIR principles

Mandates annual reports to Congress starting January 15, 2027, for four years, assessing competition, innovation, barriers to entry, and market concentration in the defense AI sector