The US government is moving to bar contractors from using government data to train large language models. The General Services Administration has issued an AI acquisition clause, effective October 19, 2026, that contractors can already start applying.

The clause states contractors cannot use government data to train LLMs, inform advertising or sell it to a third party. They must also implement data handling procedures including encrypted transmission and audit logging. The rule covers purchased AI, including AI-enabled productivity tools, but not tools contractors use internally.

The clause was issued as a class deviation to GSA’s acquisition regulations after an earlier draft faced industry pushback. It gives the government broad suspension rights and stays in place until GSA rescinds it or formalises it through rulemaking with public comment.

The Center for Democracy and Technology welcomed the final terms as a stronger foundation for safeguarding government data in AI systems.

Why it matters: the rule sets the baseline for how AI vendors handle some of the most sensitive data in the world.