To prohibit the Secretary of Defense from entering into software source code contracts with entities with certain relationships with China, and for other purposes.

This bill blocks the U.S. Defense Department from signing new contracts for software source code with companies having specific ties to China. It prohibits contracts with entities that own or fund AI facilities in China, share source code allowing Chinese reverse engineering, or operate data centers in China for such software. The Secretary of Defense may waive the ban for national security reasons, but the rule only applies to contracts entered into within three years of the law's enactment. It directly affects defense contractors and tech firms seeking to provide sensitive software source code to the Pentagon.