It’s no surprise that the FY2027 White House Budget Request is heavy on defense spending, but one of the other major themes in next year’s request is Artificial Intelligence (AI). Since the Trump Administration took office last year, AI has been a large part of the federal government’s strategy. The White House wants to become and maintain the global leadership position in AI which has been outlined in several Executive Orders and documents such as “Amercia’s AI Action Plan.”
Whether your company has fully embraced AI or you are still wary of its uses, the White House is positioning it to be a large part of federal procurement and it’s important to pay close attention to this because it will impact future solicitations and contractor requirements. Let’s review what AI investments the government plans for in 2027, and how the AI acquisition landscape is evolving.
AI Investments in the FY2027 White House Budget Request
AI is sprinkled throughout the entire budget request in both the defense and civilian budget sections. The White House is determined to accelerate AI adoption through AI development, interoperability, infrastructure, and security. While we can’t outline everywhere AI is mentioned in this document and the subsequent agency-specific documents (or this blog would be 20 pages long), we’ll cover the highlights and most significant investments, so you’ll know where to look for AI opportunities next year.
Before we begin, it’s important to point out that the budget request is what it says in the name—it’s a request, not a mandate. As we’ve seen in past years, Congress debates over the budget well into the year, so none of these numbers are final. However, it’s still a great indicator of where the federal government plans to allocate their resources and time in the next year.
Here are some of the top investments in the FY2027 budget request:
Department of Veterans Affairs (VA)
The request proposes $130 million to the Veterans Benefits Administration for automation and AI to modernize veterans claims and deliver benefits faster. Additionally, $47.8 million (increased by $4.7 million from last year) is proposed for Decision Intelligence and Automation improve operational efficiency, diagnostics, decision making, etc.
Department of War (DOW)
A lot of the budget increase requests for the Department of War include AI and autonomous systems, but the most significant line item is $58.5 billion for AI investment and combined Joint All-Domain Command and Control (CJADC2). $46 billion of this would go toward a multi-year effort to build a sovereign AI arsenal.
Environmental Protection Agency (EPA)
While this department is seeing major cuts in budget overall, the WH is hoping to set aside $202.2 million for advancing AI capabilities in EPA workflows to enhance productivity, reduce costs, and streamline processes.
Department of Justice (DOJ)
The DOJ FY2027 request primarily mentions AI as it pertains to the FBI and the Executive Office for Immigration Review (EOIR). $166 million is requested for the development of AI in FBI global terrorism efforts, tactical law enforcement preparations, and safety for the LA Olympic Games. $36.8 million is requested in the EOIR for leveraging AI to automate business processes, such as enabled transcription of court proceedings and case management system modernization.
Department of Energy (DOE)
The FY2027 White House Budget Request sets aside $1.2 billion in the Department of Energy for AI and improving energy systems and outcomes across the department. Additionally, the White House plans to continue their restructuring plan with a new office titled the “Office of Artificial Intelligence and Quantum (AIQ)”, which will be the central coordinator for AI research, quantum activities, etc.
Department of Health and Human Services (HHS)
The HHS request includes $2 million in AI investments for enhancing drug trials and improving diagnostic accuracy, as well as additional AI funds for the National Institute of Health (NIH) as it relates to electronic health records, wearable sensors, genomic data, etc. The WH is also proposing $45 million in CDC funding for AI-driven analytics with the Biothreat Radar Initiative.
History of AI in the Federal Government
AI is not a new buzzword, and it has certainly become a part of our everyday lives since ChatGPT was released to the public in 2022. The Trump Administration is not the first presidential administration to want to accelerate the use of AI, but it is the first administration to dedicate so much funding toward it.
As you can see from the graphic above, the Biden Administration was focused on guardrails, testing, and mitigating risks, while the Trump Administration is centered around AI dominance and rapid development. However, this doesn’t mean the current White House isn’t creating restrictions for AI. Regulations like the newly proposed General Services Acquisition Regulation (GSAR) clause on the Basic Safeguarding of AI Systems was created to ban the use of foreign AI systems, prohibit use of government data on AI training, and ensure stricter AI compliance in federal contracts.
AI Spending and Future Govcon Opportunities
So, what can you do with this information on AI investments while the budget is in review? Now is the time to prepare your team and your government contracts for opportunities. FY2027 starts October 1, 2026, so federal government Q4 is approaching quickly in July. If this is your first year as a contractor, or you are still looking to get a contract, Q4 is a crucial month for opportunities as agencies rush to use up their budgets.
Government contract vehicles like the GSA Multiple Award Schedule (MAS) are going to be popular places for agencies to purchase the products and services they need in the advancement and development of AI.
If you are not a GSA Schedule contractor or are part of another popular vehicle already, we are here to help. Additionally, if you are already a contractor and need assistance managing your Schedule so you’re positioned to go after these future opportunities, reach out to one of our consultants.
