This week’s defence AI landscape is defined by three converging pressures: Western governments racing to embed AI across every layer of military operations (from soldier training to autonomous targeting), a sharpening espionage threat to AI labs themselves, and a transatlantic regulatory push — EU and US alike — to establish guardrails before autonomous systems outpace accountability frameworks. The UK and Europe feature prominently, both as builders of sovereign AI capability and as targets of foreign interference.
Top story: US intelligence officials warned Congress this week that China is actively running espionage operations against American AI labs to steal frontier model technology for military advantage.
Congress Warned: China Is Actively Spying on US AI Labs
Defense One · Risk
Former US intelligence officials told the House Select Intelligence Committee on 21 July that China is deploying a range of espionage techniques to steal proprietary AI technology from American labs, with the explicit goal of advancing its own military capabilities. Witnesses called for the intelligence community to devote significantly more resources to protecting AI companies from foreign theft. The hearing signals that AI intellectual property has become a primary front in great-power competition, with direct implications for any defence contractor or AI vendor holding sensitive model weights or training data.
https://www.defenseone.com/threats/2026/07/ai-labs-spies/414929/
Raytheon-Led Consortium Wins UK’s £2bn AI Combat Laboratory
The Next Web · Strategy
The UK Ministry of Defence awarded a £2 billion, 15-year contract to a Raytheon UK-led consortium — including Rheinmetall UK, Capita, Cervus, and Skyral — to build an AI-powered ‘Combat Laboratory’ that will train up to 60,000 British soldiers per year using virtual battlefields and advanced analytics. The deal is a flagship plank of the government’s ambition to make the British Army ten times more lethal by 2035. However, critics note a sovereignty tension: the MoD insists IP stays under UK control, yet the contract’s largest slice goes to an American lead contractor with a German defence prime as major partner.
https://thenextweb.com/news/uk-army-ai-combat-laboratory-2bn-contract