This legislation authorizes the Secretary of Defense to establish one or more National Security and Defense Artificial Intelligence Institutes at eligible U.S. academic institutions. These institutes are designed to address cross-cutting challenges and foundational science for artificial intelligence systems within the national security and defense sector. Each institute would foster partnerships among public and private organizations, including universities, federal agencies, and industry, to create an innovation ecosystem. This ecosystem aims to translate research into practical applications that enhance national security and defense capabilities, while also supporting interdisciplinary research and development. The bill permits the Secretary of Defense to award financial assistance for a five-year period, with a possible renewal, through a competitive, merit-based review process. Funds can be used for managing secure data sets, developing AI testbeds, conducting research, providing computing resources, and offering technical assistance. Crucially, the institutes would also focus on workforce development in AI-related disciplines and engage in outreach to broaden participation in AI research. All financial assistance recipients, including subgrantees, must be based in the United States, ensuring domestic focus for these critical defense technologies.