The AI Government Contracting Gold Rush

The future of AI is infrastructure.

Across the U.S., some of the world’s most powerful companies are pouring billions into AI-optimized data center campuses—the kind built not just for storage, but for training massive AI models, powering autonomous decision systems, and hosting classified hybrid workloads.

This isn’t about the cloud. It’s about compute.

And the federal government is responding—with contracting activity and policy direction that mirrors what the private sector started years ago.

The Private Sector Set the Pace

In 2025 alone:

• Meta is building a $10 billion AI data center in northeast Louisiana, its largest single facility ever. The project is optimized for generative AI workloads and includes multi-gigawatt energy capacity. → Source: ConstructConnect
• Google has committed $25 billion to AI infrastructure across the PJM grid region—including $3 billion to hydro power upgrades—and is breaking ground on a $10 billion hyperscaler campus in West Memphis, Arkansas. → Sources: Investopedia, WeAreMemphis
• Oracle, partnering with OpenAI, is now building 4.5 gigawatts of AI data center capacity under Project Stargate, targeting $500 billion in global investment across the next four years. → Source: Reuters

This isn’t a trend. It’s a computational arms race.

And now, the federal government is racing to catch up—through contracts, set-asides, and vehicles with $54 billion in ceilings already awarded.

Federal Spending Is Actually Moving

Two Product Service Codes (PSCs) indicate where the government is investing to build this infrastructure:

DC01 Data Center Support Services (O&M, hybrid cloud, migration, infrastructure)

DB01High-Performance Computing Support (HPC, supercomputers, AI model ops)

Together, these two codes saw $1.3 billion obligated in FY24—but that’s only part of the story.

FY24 Spend $913.7M / $401.6M

Contract Ceiling $25.37B / $28.81B

Awards 871430

Avg # of offers received per solicitation: 2.78 / 2.85

That’s $54B in ceiling value already awarded across federal vehicles—primed for task orders, recompetes, and follow-ons as agencies try to match private sector pace.

Subcontracting

Most of the spending in DC01 and DB01 is flowing through contracts that require large primes to subcontract to small businesses.

Takeaways: What the Numbers Are Telling Us

1. Private investment is driving policy. Meta, Google, and Oracle are laying the foundation. Government contracts are following.
2. The government is catching up fast—but you have to be early. Agencies like DoD, NASA, and DHS are accelerating task orders under already-awarded vehicles. If you wait for public RFPs, you’ll be late.
3. The early bird gets the worm. The predominant amount of awards are openly competed. This means finding the opportunities before the solicitation comes out is critically important. Start in the market research phase: find sources sought, RFIs, and review acquisitions forecasts.
4. Subcontracting. A large amount of the awarded contracts from FY24 required subcontracting plans. Start by finding an opportunity in the market research phase, then reach out to a prime that has past performance and partner with them on the proposal.

📣 Want to Win in FY25–27?

The key to winning government contracts is understanding how federal agencies buy what you sell. The GovClose Certification Program is a one-year life event that teaches how to sell to the US government. In turn, that knowledge into revenue.

Follow me on LinkedIn Richard C. Howard, Lt Col (Ret) for the latest in government contracting updates and news.