by Henry Fina and Matthew P. Suzor
Left to right: Henry Fina and Matthew P. Suzor (photos courtesy of Miller Shah LLP)
The explosion of the Artificial Intelligence market has drawn capital investment from almost every corner of the economy. The federal government is no exception. Between FY 2022 and 2023, the potential value of federal AI contracts increased from approximately $356 million to $4.6 billion. In July 2025, the Trump Administration released its AI Action Plan, outlining government initiatives to aggressively deploy AI in the health and defense sectors. Accordingly, the Department of Health and Human Services (HHS) and Department of Defense (DoD) have increased funding allocations toward AI contracts. As contractors compete for increasingly valuable awards with limited oversight, the potential for misrepresented capabilities and compliance gaps grows. While the industry’s strong tailwinds may translate into lucrative opportunities for investors and entrepreneurs, for qui tam litigators, the expansion of publicly contracted AI services signals a new frontier for False Claims Act (FCA) enforcement. In turn, the FCA will be essential in ensuring accountability as federal agencies gradually adjust oversight mechanisms to handle the inconsistent reliability and limited technological opacity of AI models.