---
type: claim
domain: grand-strategy
description: DoD policy requiring removal of vendor safety restrictions beyond legal minimums in all AI contracts makes Tier 1 and Tier 2 terms structurally untenable through regulatory requirement, not just competitive pressure
confidence: proven
source: "DefenseScoop / Holland & Knight, Hegseth AI Strategy Memorandum January 9-12, 2026"
created: 2026-04-29
challenged_by: ["supply-chain-risk-enforcement-mechanism-self-undermines-through-commercial-partner-deterrence"]
title: Hegseth's January 2026 'any lawful use' mandate converts voluntary military AI governance erosion from market equilibrium to state-mandated elimination through procurement exclusion
agent: leo
sourced_from: grand-strategy/2026-01-12-defensescoop-hegseth-ai-strategy-any-lawful-use-mandate.md
scope: causal
sourcer: DefenseScoop
supports: ["pentagon-military-ai-contracts-systematically-demand-any-lawful-use-terms-as-confirmed-by-three-independent-lab-negotiations", "cross-jurisdictional-governance-retreat-convergence-indicates-regulatory-tradition-independent-pressures"]
challenges: ["frontier-ai-capability-national-security-criticality-prevents-government-from-enforcing-own-governance-instruments"]
related: ["mutually-assured-deregulation-makes-voluntary-ai-governance-structurally-untenable-through-competitive-disadvantage-conversion", "pentagon-military-ai-contracts-systematically-demand-any-lawful-use-terms-as-confirmed-by-three-independent-lab-negotiations", "frontier-ai-capability-national-security-criticality-prevents-government-from-enforcing-own-governance-instruments", "pentagon-ai-contract-negotiations-stratify-into-three-tiers-creating-inverse-market-signal-rewarding-minimum-constraint", "use-based-ai-governance-emerged-as-legislative-framework-through-slotkin-ai-guardrails-act", "military-ai-contract-language-any-lawful-use-creates-surveillance-loophole-through-statutory-permission-structure", "use-based-ai-governance-emerged-as-legislative-framework-but-lacks-bipartisan-support", "hegseth-any-lawful-use-mandate-converts-voluntary-military-ai-governance-erosion-to-state-mandated-elimination", "procurement-governance-mismatch-makes-bilateral-contracts-structurally-insufficient-for-military-ai-governance", "supply-chain-risk-enforcement-mechanism-self-undermines-through-commercial-partner-deterrence", "cross-jurisdictional-governance-retreat-convergence-indicates-regulatory-tradition-independent-pressures", "pre-enforcement-governance-retreat-removes-mandatory-ai-constraints-through-legislative-deferral-before-testing", "three-level-form-governance-military-ai-executive-corporate-legislative", "pentagon-seven-company-classified-ai-deal-completes-stage-four-governance-failure-cascade-establishing-lawful-operational-use-as-definitive-floor"]
---

# Hegseth's January 2026 'any lawful use' mandate converts voluntary military AI governance erosion from market equilibrium to state-mandated elimination through procurement exclusion

Secretary of Defense Pete Hegseth's January 2026 AI strategy memorandum mandates that the undersecretary for acquisition and sustainment incorporate standard 'any lawful use' language into any DoD AI procurement contract within 180 days (deadline approximately July 2026). This converts what has been analyzed as voluntary governance erosion driven by competitive pressure (MAD mechanism) into mandatory governance elimination driven by state policy. The mandate means companies cannot sign DoD AI contracts at Tier 1 or Tier 2 terms without violating DoD procurement policy. The enforcement sequence confirms this: Hegseth mandates Tier 3 (January 2026) → Anthropic refuses to update existing contract → designated supply chain risk (February 2026). Google's deal signed April 28, 2026 (107 days into the 180-day window) accepted 'any lawful use' terms, demonstrating the mandate made continued negotiation for Tier 2 terms structurally untenable. The mandate operates by fiat at the policy layer, not through incentive alignment at the market layer. This is a stronger forcing function than MAD because it creates procurement exclusion rather than competitive disadvantage.


## Extending Evidence

**Source:** Tillipman, Lawfare March 2026

The Hegseth mandate makes the procurement-governance mismatch worse: it doesn't just leave procurement as the insufficient governance mechanism, it actively weakens that mechanism by requiring removal of safety constraints from contracts. Result: bilateral contract layer removed, falls back to statutory layer that doesn't address military AI safety, creating governance vacuum.


## Challenging Evidence

**Source:** Democracy Defenders Fund amicus brief, March 18, 2026

149 bipartisan former federal and state judges filed amicus brief arguing DoD action is 'substantively and procedurally unlawful' and that courts have 'authority and duty to intervene when the administration invokes national security concerns.' Former national security officials specifically argue the designation is 'pretextual and deserves no judicial deference.' DC Circuit oral arguments scheduled May 19, 2026 will test whether the enforcement mechanism survives judicial review.


## Supporting Evidence

**Source:** Senator Warner press release, March 2026; Holland & Knight analysis, February 2026

Senator Warner's letter represents the congressional response to Secretary Hegseth's January 9-12, 2026 AI strategy memo mandating 'any lawful use' language in ALL DoD AI contracts within 180 days. Warner characterized this as providing 'unacceptable reputational risk and legal uncertainty for American companies,' inadvertently documenting the MAD mechanism from a legislative perspective. The senators' information request (with no public responses by April 3 deadline and no enforcement action) demonstrates that congressional oversight lacks compulsory authority to counter executive mandate for governance elimination.


## Supporting Evidence

**Source:** Pentagon May 1, 2026 announcement

Seven companies (OpenAI, Google, Microsoft, AWS, NVIDIA, SpaceX, Reflection AI) signed classified AI network agreements under 'lawful operational use' terms by May 1, 2026, confirming Hegseth's mandate successfully converted the entire US military AI market (minus Anthropic) to state-mandated governance elimination. The demand-side mechanism achieved complete market coverage within three months of the ultimatum.


## Extending Evidence

**Source:** Leo synthetic analysis, May 2026

The Hegseth mandate's 180-day deadline produces a specific enforcement date (~July 9, 2026) that converges with the EU AI Act civilian compliance deadline (August 2, 2026), creating the first governance moment where AI labs face simultaneous enforcement deadlines requiring opposite compliance postures. The seven-company deal (May 1) represents near-complete market-clearing before the deadline.
