Governments regulate private military-AI suppliers through a stack of controls rather than one universal statute. Procurement rules decide which companies are eligible to sell; export and end-use controls decide where software, models, data and technical help may go; defense directives require testing, human judgment and lawful operation; and contracts, alliance standards and international humanitarian law shape deployment and accountability.
The legal result depends on the system’s technical function, customer, destination and intended use. A general-purpose model sold for civilian logistics may face a different regime from the same model integrated into a targeting or autonomous-weapons system. The United States and United Kingdom regulate suppliers through defense policy, procurement and export controls. The European Union’s AI Act expressly excludes military, defense and national-security uses, while NATO supplies interoperability and responsible-use principles rather than a single licensing system.
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Regulation is a stack, not a single military-AI law
A private company can encounter several government controls during the life of one product. A defense ministry may first screen the company’s ownership and supply chain before awarding a contract. Export authorities may then classify the model, sensors, software, technical documentation or training assistance and require a license for a foreign transfer. Defense evaluators can require evidence that the system performs reliably in realistic conditions, while commanders and operators must retain an appropriate level of human judgment over force. A later sale to an ally can trigger separate foreign-disclosure, technology-security and end-user reviews.
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These layers apply to more than a finished weapon. They can reach model weights, specialized chips, training data, source code, cloud access, updates, technical assistance, maintenance and brokering. Contract clauses often turn broad policy principles into concrete obligations such as cyber controls, audit rights, incident reporting, operator training and the ability to disable a system.
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How the main jurisdictions differ
| Jurisdiction or framework | Horizontal AI-law treatment | Procurement and supply-chain controls | Export and military-end-use controls | Autonomy, testing and norms |
|---|---|---|---|---|
| United States | Military AI is governed mainly through defense policy, procurement statutes, contracts and agency rules rather than a single AI statute. | DoD eligibility can depend on ownership and equipment provenance. A 2024 U.S. Code restriction applies to certain contracts involving covered foreign unmanned-aircraft systems from 1 October 2024, with specified exemptions and a written national-interest waiver. | International sales or transfers must pass technology-security and foreign-disclosure processes, alongside applicable export controls. | DoD policy requires appropriate human judgment over force, lawful operation, realistic-condition performance and alignment with responsible-AI principles. |
| United Kingdom | Military suppliers are reached primarily through export-control, defense-procurement and contract rules. | Customers and suppliers must satisfy the requirements in the relevant defense contract and conduct due diligence on counterparties. | Licenses are required for controlled military goods, software and technology and for items on the UK dual-use list. Case-by-case military-end-use controls can cover otherwise unlisted items. | Exporters must classify products, check destinations and end users, and assess technical assistance, brokering, embargoes and catch-all controls. |
| European Union | Regulation (EU) 2024/1689 excludes AI systems used for military, defense or national-security purposes, regardless of whether a public or private entity performs the activity. | National defense procurement, cybersecurity, sanctions and contract rules still apply outside the AI Act’s scope. | Member-state and EU export, sanctions and dual-use regimes can still govern transfers. | International public law, including international humanitarian law, is the relevant framework for military and lethal-force uses; civilian deployments remain subject to applicable EU rules. |
| NATO | NATO has no single licensing law for private suppliers. | Interoperability requirements, national implementation and contract standards can make NATO principles commercially significant. | Allied national export and disclosure rules remain the licensing mechanisms. | Six responsible-use principles are lawfulness; responsibility and accountability; explainability and traceability; reliability; governability; and bias mitigation. International humanitarian law applies fully to weapons systems. |
United States: procurement, autonomy policy and foreign disclosure
Defense policy controls how autonomous functions are built and used
The Department of Defense release dated 25 January 2023 states that autonomous and semi-autonomous weapon systems must be designed so commanders and operators can exercise appropriate levels of human judgment over the use of force. Users must act with appropriate care and comply with the law of war, treaties, safety rules and rules of engagement.
The policy also requires demonstration of appropriate performance, capability, reliability, effectiveness and suitability under realistic conditions. A vendor therefore cannot treat a laboratory demonstration or benchmark as the end of assurance. Evidence must address the environments, data quality, communications limits, adversarial conditions and failure modes the military expects in operation. The capability must align with DoD AI Ethical Principles and the Responsible AI Strategy.
That policy reaches the supplier through requirements, design reviews, verification and validation, operational approval and contract deliverables. It does not authorize a company to decide independently when force may be used. Commanders and operators retain responsibility within the chain of command, and the system must be controllable, monitored and capable of being handled safely when behavior is uncertain.
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Procurement eligibility can exclude a supplier before technical evaluation
U.S. procurement law adds a supply-chain gate. A 2024 U.S. Code provision prohibits certain Department of Defense contracts involving covered foreign unmanned-aircraft systems beginning 1 October 2024. The restriction includes defined exemptions for counter-unmanned-aircraft testing and for intelligence, electronic-warfare and information-warfare activities. A written national-interest waiver is also available under the conditions specified by law.
The practical effect is that ownership, manufacturing origin, component provenance and subcontractor relationships can determine market access. A company may have a capable model and still be ineligible if its proposed solution includes restricted equipment or a prohibited supply-chain relationship. Due diligence should therefore map every hardware and software dependency, not only the company that signs the prime contract.
Transfers require more than a commercial sale
International sales and transfers of a U.S.-developed capability can require technology-security and foreign-disclosure approval in addition to export licensing. Reviews can cover source code, model parameters, sensor specifications, training material, maintenance access and the identity of the foreign recipient. A contract that permits a foreign affiliate or cloud provider to access the system may create a transfer issue even when no physical device crosses a border.
United Kingdom: licensing, classification and military end use
Start with the control lists
The UK Export Control Joint Unit states: “An export licence is needed before the export of controlled military goods, software and technology and items on the UK dual-use list from the United Kingdom to another country.” The exporter must assess the product against the strategic control lists and use the government’s licensing and goods-checker tools.
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For AI suppliers, classification can involve the model’s capabilities, specialized hardware, encryption, sensors, simulation tools, source code and technical documentation. Controls can also cover technical assistance, brokering and electronic transfers. Sending an update to an overseas maintenance team or giving a foreign customer remote access to a controlled technical environment may require the same care as shipping equipment.
Unlisted items can still be controlled for military end use
UK military-end-use rules can apply case by case to goods, software and technology that do not appear on a control list. The government guidance is designed to address transactions where the intended military application raises concern. Firms are expected to conduct due diligence on relevant military, police, security or intelligence entities and can seek end-user advice before exporting.
A practical UK review asks five questions:
- How is the item classified on the strategic control lists?
- What is the destination, including any transit or re-export location?
- Who is the end user and who will operate, maintain or receive updates?
- What military application is intended, including targeting, surveillance, command support or autonomy?
- Do an embargo, catch-all provision, technical-assistance rule or brokering control apply?
Keeping a written classification decision, end-user statement, screening record and technical description gives the exporter an auditable basis for the license application and for later changes to the system.
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Recital 24 of Regulation (EU) 2024/1689 says that when AI systems are placed on the market, put into service or used for military, defense or national-security purposes, “those should be excluded from the scope of this Regulation regardless of which type of entity is carrying out those activities, such as whether it is a public or private entity.” The stated rationale is that EU treaty arrangements and international public law are more appropriate for military and lethal-force use.
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This is a scope boundary, not immunity from law. A company can still face national defense-procurement conditions, export controls, sanctions, cybersecurity obligations, contractual security requirements and international humanitarian law. The same company may also operate a civilian version of a system that remains within the AI Act or other EU rules.
Classify each deployment, not just the model
A general-purpose model does not receive one permanent legal status for every customer. A civilian logistics deployment, a border-security application and an integration into a military command system can involve different obligations. Classification should be revisited when the customer, data, interface, autonomy level, intended use or geographic destination changes.
Separating civilian and military configurations helps with access controls, documentation and compliance evidence. It also prevents a supplier from assuming that the military exclusion removes obligations that apply to a non-military product, shared cloud service, employee transfer or export.
NATO and international humanitarian law
NATO’s autonomy implementation plan asks Allies and NATO bodies to implement AI-enabled autonomous systems consistently with NATO’s Principles of Responsible Use and international law. The six principles are lawfulness; responsibility and accountability; explainability and traceability; reliability; governability; and bias mitigation.
For suppliers, these principles operate through interoperability expectations, technical standards, assurance cases and national contracts rather than a NATO export license. A system intended for allied use may need interfaces, logs, test evidence and controls that let different nations understand, supervise and, if necessary, stop its behavior.
NATO also states that international humanitarian law applies fully to weapons systems, including potential lethal autonomous weapons. That means autonomy does not remove obligations such as distinction, proportionality and precautions in attack. The legal review remains tied to the weapon and the circumstances of use, not to whether an algorithm made part of the recommendation or selection.
What compliance looks like inside a private supplier
Controls should be built into the product lifecycle. The following sequence reflects the points at which a company is most likely to need a decision, record or approval.
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- Map the capability and dependencies. Describe what the system can sense, predict, recommend or control. Inventory model weights, data, chips, sensors, communications links, cloud services, subcontractors and update channels.
- Classify the technology and use. Check military and dual-use lists, destination rules and intended end use. Record whether the system is civilian, dual-use, military-support or directly connected to force.
- Screen procurement eligibility. Review ownership, foreign equipment, component provenance and subcontractors against the customer’s statutes and solicitation. Identify whether an exemption or national-interest waiver is legally available before bidding.
- Secure research and development. Protect model weights, sensitive data, source code and technical information. Limit access by role and location, and control collaboration with foreign persons or entities where disclosure rules apply.
- Build an assurance case. Test performance, capability, reliability, effectiveness and suitability under realistic conditions. Include degraded communications, sensor errors, adversarial inputs, distribution shifts and human-machine handoffs. Preserve test data, version histories and known limitations.
- Define human authority. Specify who may authorize activation, change mission parameters, approve a use of force, pause the system and deactivate it. Document operator training, escalation paths, rules of engagement and supervision during operation.
- Provide governability and traceability. Keep logs that connect inputs, model versions, recommendations, human decisions and outcomes. Design safe states and a practical way to disengage or deactivate the system when it shows unintended behavior.
- Obtain transfer approvals. Before an overseas sale, update, demonstration or technical-support session, check export licenses, end-user assurances, sanctions, foreign-disclosure and technology-security requirements. Recheck when the customer or configuration changes.
- Monitor after delivery. Track incidents, near misses, model drift, cybersecurity events, unauthorized access and changes in mission use. Contractual reporting and corrective-action duties can continue long after acceptance testing.
Who is responsible when an AI-enabled weapon causes harm?
No single source establishes a universal liability rule for every military-AI incident. Responsibility is distributed among the state, commanders, operators, prime contractors, integrators and component suppliers according to the applicable law and contract.
Government personnel remain responsible for lawful employment decisions within their authority. A contractor can face contractual remedies, procurement exclusion, export penalties, sanctions, negligence or product-related claims where those causes of action are available. An integrator may bear obligations that differ from those of a company supplying a general-purpose model, especially when it selected data, set operating limits or connected the system to a weapon.
Traceability is therefore central. A supplier should be able to show which version was delivered, what tests supported approval, what warnings were provided, who changed mission parameters, what the operator saw and whether the system’s controls worked as designed. Documentation cannot eliminate legal risk, but missing records make it harder to establish that the company met its duties.
Questions governments and suppliers have not settled
- General-purpose models: Classification is unsettled when a broadly capable model is adapted later for military use. The adaptation, interface and end use may matter as much as the original model.
- Common cybersecurity baselines: Allied markets may converge on mandatory security controls, but the cited frameworks do not create one universal supplier standard.
- Cross-border cloud access: Remote inference, foreign administrators and shared repositories can create disclosure or export questions even without a physical shipment.
- Allocation of liability: National law and contract language differ on how responsibility is divided when a contractor’s model is integrated into a government weapon system.
- Meaning of human judgment: Policies require an appropriate level of human judgment, but the operational design, timing and information needed to make that judgment depend on the mission and system.
For now, the safest interpretation for a private supplier is practical: treat military AI as a controlled lifecycle, not an ordinary software sale. Determine who may buy it, where every component and technical service may go, what evidence supports its behavior in realistic conditions, how humans retain authority, and how an incident can be reconstructed.
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