Liability Shapes Cyber AI Arms Race

Liability rules for AI providers change incentives across attackers, defenders and productive users: higher liability can reduce wasted defensive effort but may weaken active defenses and increase attacker profits, while market concentration (monopoly vs competition) alters what level of liability is optimal. Policy choices (liability, guardrail mandates, competition policy) therefore determine whether AI access accelerates offense, bolsters defense, or simply excludes productive uses. — Designing liability and guardrail regimes is a practical, high‑stakes lever that will shape national cybersecurity, industry structure, and who can legally supply or use dual‑use AI tools.