Defining Artificial Intelligence and Its Potential Impact on Government Contractors

There Is No Single Legal Definition of “Artificial Intelligence.” Does It Matter for Government Contractors?

This article provides an overview of the key Federal and state definitions of artificial intelligence (“AI”) and assesses their potential impact on Federal government contractors.

Part I covers the two most referenced definitions of AI in Federal statutes, legislative proposals, and agency guidance: the AI definition in the National Defense Authorization Act for FY 2019 and the AI definition in the National AI Initiative Act of 2020.

Part II discusses an ongoing shift, at Federal and state levels, toward defining AI based on the type of system (i.e., generative AI and dual-use models) and whether AI system use cases create risks to people’s rights or safety.

Part III examines the Office of Management and Budget (“OMB”) Advancing the Responsible Acquisition of Artificial Intelligence in Government Memorandum, released on October 3, 2024, and the risk-based model for AI in the proposed PREPARED for AI Act, as the most likely vehicles for imposing AI requirements across Federal contracts. Part III also identifies potential issues and implications that may arise for government contractors based on these AI regulatory trends and examines California’s Requirements for State Agency Procurement of Generative AI.

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