What happened
The CSIS Futures Lab quantified how Washington buys AI, finding that between FY 2019 and FY 2025 federal agencies awarded 2,255 identified AI-related awards with $4.1 billion in total obligations, and that the number of AI contracts more than tripled over the period to reach $1.162 billion in FY 2025 obligations. The Department of Defense dominates at 64% of contracts and 83% of obligations, while Palantir and Scale AI together account for roughly $597 million (about 15% of obligations) from under 1% of contracts. Crucially, the report finds over half of AI solicitation notices contain no clear governance language, and notes the data understates defense and intelligence-community spending. Methodology: analysis of SAM.gov solicitation notices and awarded federal contract records in USAspending.
Why it matters
This is the most complete public, evidence-based map of the US federal AI market — who is buying, who is winning, and where acquisition governance is lagging — directly informing vendor engagement, contracting, and policy positions on federal AI procurement.
Action needed
For sellers: assess the fragmented but top-heavy federal AI market against your go-to-market. For policy leads: use the 'over half of solicitation notices contain no governance language' finding to press for monitoring, benchmarking, portability, and incident-reporting requirements in AI acquisitions.