ARTICLE
13 July 2026

Does Using AI On A Government Contract Put Your Trade Secrets At Risk? What Defense Contractors Need To Know (Video)

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Taft Stettinius & Hollister

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Established in 1885, Taft is a nationally recognized law firm serving individuals and businesses worldwide, in both mature and emerging industries.
Defense contractors using artificial intelligence in government contract performance face a critical question about intellectual property rights. While AI-assisted work doesn't automatically transfer proprietary systems to the government, vague transparency and explainability clauses in contracts can quietly expand disclosure obligations and erode decades-old trade secret protections.
United States Government, Public Sector
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Artificial intelligence is moving into government contract performance.

  • AI now supports scheduling, logistics, and production planning on federal contracts.

Defense contractors are asking a critical question.

  • Does using AI on a Navy or other government contract give the government rights to your proprietary systems, methods, or data?
  • The short answer is no. The real risk lies elsewhere.

Vague AI transparency and explainability clauses can quietly expand disclosure obligations.

  • This contract language can erode trade secret protections that have existed for decades.

This video explains how government IP rights apply to AI-assisted performance and identifies the exposure points that general counsel need to know about.

  • Key actions include defining deliverables precisely, managing explainability requests without revealing proprietary logic, and treating AI workflows as intellectual property assets.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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