On April 3, the Office of Management and Budget (OMB) released two much-anticipated memos that will impact the use and procurement of artificial intelligence (AI) by the federal government, signaling an appetite to move quickly to set AI policy. The two memos—M-25-21: Accelerating Federal Use of AI through Innovation, Governance, and Public Trust (M-25-21) and M-25-22: Driving Efficient Acquisition of Artificial Intelligence in Government (M-25-2)—were issued in accordance with President Trump’s January 23 Executive Order and rescind and replace two Biden Administration memos on the same topics.
As the first public deliverables from the AI EO, the OMB directives offer the first details and insights into this Administration’s approach to federal agency use and procurement of AI. Overall, the memos provide guidance aimed to advance U.S leadership in AI, drive AI innovation, and encourage agencies to use AI to increase quality and efficiency of government services, while at the same time “ensuring appropriate safeguards are in place to protect privacy, civil rights, and civil liberties, and to mitigate any unlawful discrimination.”
In particular, for what it deems to be “high-impact AI,” M-25-21 establishes minimum risk management practices, which include pre-deployment testing, AI impact assessments, and ongoing monitoring, among other things. While the memos outline a new and distinct approach, the risk-based approach builds on themes from the first Trump Administration, as well as the Biden Administration, regarding promoting responsible AI use within the federal government.
The memos will impact government contractors in a number of ways, including requiring new governance approaches and risk management requirements within federal agencies for contractors to navigate, but also by encouraging the use and procurement of new AI products and services and setting in motion initiatives to harness AI at individual agencies.
Much of the high-level framework of the new Trump Administration OMB memos focuses on AI systems that present some level of higher “risk,” which are subject to certain risk mitigation practices. While the previous Biden Administration memos focused on “rights-impacting” and “safety-impacting” AI, the latest Trump Administration memos focus on “high-impact” AI.
M-25-21 sets out guidance for federal agency use of AI and rescinds and replaces the Biden Administration’s M-24-10: Advancing Governance, Innovation, and Risk Management for Agency Use of Artificial Intelligence. This memo is scoped to apply only to “new and existing AI that is developed, used, or acquired by or on behalf of covered agencies,” and explicitly carves out the use of AI in a National Security System.
This memo establishes three core directives to the heads of all Executive branch departments and agencies, including independent regulatory agencies:
1. Remove barriers to innovation and provide the best value for the taxpayer.
2. Empower AI leaders to accelerate responsible AI adoption.
3. Ensure their use of AI works for the American people.
The second memo, M-25-22, provides both requirements and recommendations for federal procurement of AI, rescinding and replacing M-24-18: Advancing the Responsible Acquisition of Artificial Intelligence in Government. This memo will go into effect on October 1, 2025, and applies to any contracts awarded or renewed after that date but excludes contracts for AI systems acquired for use as a component of a national security system.
There are three core policies that drive the requirements and recommendations in this memo: (1) ensuring the government and the public benefit from a competitive American AI marketplace; (2) safeguarding taxpayer dollars by tracking AI performance and managing risk; and (3) promoting effective AI acquisition with cross-functional engagement. The memo also tasks the General Services Administration (GSA) with creating publicly available guide(s) to assist with the procurement of AI systems within 100 days and to develop a web-based repository to facilitate the sharing of information, knowledge, and resources about AI acquisition within 200 days.