Decoding OMB Memorandums M-25-21 and M-25-22

Written by Emily Wolfteich
Senior Industry Analyst

In early 2025, the Office of Management and Budget (OMB) released two critical memorandums—M-25-21 and M-25-22—that signal a major shift in how artificial intelligence (AI) will be deployed across the federal government. These memos replace earlier Biden-era Executive Orders on AI, which the Trump administration rescinded in January. With these changes, the federal AI landscape is entering a new phase characterized by greater agency autonomy, a push for innovation, and challenges around governance and collaboration.

Background

In January 2025, President Donald Trump signed Executive Order, “Removing Barriers to American Leadership in Artificial Intelligence,” which rescinded two Biden-era AI EOs that had played large roles in shaping federal procurement and use of AI. This rescission briefly created a temporary guidance vacuum in federal AI policy.

The administration’s new policy direction emphasizes reducing bureaucratic guardrails to promote innovation and aligns with other policy directives, such as the National Security Presidential Memorandum on the "America First Investment Policy." The overarching aim is to keep both AI innovation and production within U.S. borders, challenging the earlier emphasis on regulatory frameworks and international collaboration. It also aims to streamline procurement through eliminating some regulations and simplifying acquisition policies.

To fill the gap, OMB issued:

M-25-21: "Accelerating Federal Use of AI through Innovation, Governance, and Public Trust"
M-25-22: "Driving Efficient Acquisition of Artificial Intelligence in Government"

Together, these documents lay out a roadmap for integrating AI more deeply into federal agency operations.

Broader Implications for U.S. AI Policy

These memorandums mark a significant shift in federal AI strategy. AI is no longer just an IT byline; it is expected to be woven into all agency activities as both a strategic tool and mission imperative. However, accelerating adoption while maintaining public trust is not a new goal, and it remains to be seen if this new direction is more successful than under President Biden or during President Trump’s first term. The memoranda encourages more AI within government agencies, including in decision making roles, though it does not make any provisions to increase AI technical staff within these agencies (something we routinely see in our research as a problem). Instead, agencies are encouraged to prioritize resource sharing, which brings its own set of complications. These talent shortages, along with data privacy concerns, and a persistent mistrust of AI by government employees and the broader public are all serious barriers that are not touched on in these broad policy strokes.

For industry, these memoranda aim to reduce regulatory structures that might hinder innovation, and create more streamlined procurement processes, opening the door for increased AI investments across both the federal civilian and defense sectors.

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Decoding OMB Memorandums M-25-21 and M-25-22

Background

Broader Implications for U.S. AI Policy

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