Dual-Use Technologies: The Hidden Military Side of Europe’s AI, Chips and Space Industry

Artificial intelligence, semiconductors, satellites, robotics.

Most people see them as civilian technologies powering the digital economy.

But many of these innovations also have a military dimension.

They are what regulators call dual-use technologies — technologies that can serve both civilian and defence purposes.

As geopolitical tensions rise and global defence spending reaches record levels, these technologies are becoming strategic assets for governments and industry.

And this shift is triggering a rapid expansion of European regulation, from export controls to foreign investment screening, sanctions regimes and industrial policy initiatives such as the European Defence Fund and the EU Chips Act.

In this episode of Diritto al Digitale, Giulio Coraggio, location head of the Italian department of Intellectual Property & Technology at the global law firm DLA Piper, explores:

• what qualifies as a dual-use technology
• the EU legal frameworks governing these technologies
• why companies developing AI, chips, robotics and aerospace technologies are increasingly affected by defence regulation
• the industrial opportunities for European and Italian companies in this rapidly evolving sector
• and the growing intersection between technology, law and geopolitics

If you work in technology law, compliance, defence, AI, semiconductors or export control, this is a conversation you cannot afford to miss.

Because the future of innovation in Europe will increasingly depend on technologies that are both civilian and military at the same time.

📌 You can find our contacts 👉 www.dlapiper.com

Transcript

SPEAKER_00 0:11

Semiconductor developed for high performance computing, a machine learning system designed to analyze medical imaging, a navigation technology created to improve the safety of autonomous vehicles. All of these technologies have something in common. They were originally designed for civilian applications, but each of them can also be used for military purposes. And this is precisely what defines dual use technologies. Technologies that can serve both civilian and military functions. In recent years, the relevance of the dual-use sector has grown dramatically. Geopolitical tensions, increased defense spending, and the global competition for technological leadership are pushing governments to pay much closer attention to how sensitive technologies are debit, transfer and export. For companies within the European Union, in particular for the Italian industrial economy ecosystem, this evolution creates both significant opportunities and complex revolting changes. In this episode, we explore the religious framework rewarding world-use technologies and discuss why this topic is becoming increasingly important for companies operating in advanced technology technically. I'm Julio Faraggio, technology and data lawyer and partner at the Global Office Delegate. In each episode, we discuss the legal and regulatory revenues that are transforming the innovation planet. From artificial intelligence and cybersecurity to digital platforms and emerging technologies. And today we are focusing on dual use technologies and the defense sector, a topic that sits at the intersection of technology regulation, geopolitics, and industrial policy. So, why in dual use technologies matter today? The importance of dual use technology has increased significantly over the past few years. This is largely due to the evolving geopolitical context. According to data from the Stockholm International Peace Research Institute, global military expenditure reached approximately$2.4 trillion in 2024, marking the highest level ever recorded. At the same time, governments are increasingly concerned about technological sovereignty and strategic autonomy. Advanced technologies such as semiconductors, AI, quantum computing, and satellite systems are now seen as strategic assets that can influence both economic competitiveness and national security. And many of these technologies originate in the civilian technology ecosystem rather than in traditional defense industries. This is a major structural change. Today, the opposite is frequently true. Commercial technology development is driving military innovation. So what are dual use technologies? From a legal perspective, dual use items are good software and technologies that can be used for both civilian and military purposes. Examples include advanced microelectronics and semiconductors, encryption technologies, satellite navigation systems, drones and autonomous systems, advanced materials and lasers, artificial intelligence and high performance computing systems. Because of their potential military applications, international trade of these technologies is subject to strict export control regimes. The objective of these regimes is to prevent sensitive technologies from being used for the development of weapons or mass destruction. Military programs that could destabilize international security, surveillance technologies used in violation of human rights. So, what is the EU regulatory form framework for these technologies? In the European Union, the main legal instrument governing dual use technologies is the Regulation 2021 A21, commonly referred to as the EU dual use regulation. The regulation establishes a harmonized framework for controlling the export brokering technical assistance in transit of dual use items. Under this framework, companies exporting certain technologies outside the European Union must obtain export authorizations from national competent authorities. The regulation also incorporates control lists aligned with international export control regimes, such as the Western R arrangement, the Nuclear Suppliers Group, the Australia Group, the Missile Technology Control Regime. One of the most important innovations introduced by the 2021 reform concerns the cyber surveillance technologies. The regulation now allows authorities to restrict exports of certain digital technologies if they may be used for internal repression of human rights violations. This reflects a broader shift in export control policy, where national security considerations are increasingly intertwined with fundamental rights concerned. So, what is the role of national authorities? Although the EU regulation harmonizes the legal framework, the responsibility for granting export authorizations remains with national authorities. In Italy, this role is performed by the UAMA, the unit for the authorizations of armament materials within the Ministry of Foreign Affairs. Companies operating in advanced technologies sectors must therefore implement robust internal processes to ensure compliance with export control rules. These processes typically include classification of products against dual-use control lists, screening of customers and counterparties, assessment of and use and end users, monitoring of sanctions regimes. Export control compliance has become particularly critical following the sanctions adopted against Russia after the invasion of Ukraine, which include extensive restrictions on export of dual use technologies. So what are the industrial opportunities for the Italian ecosystem? While export control regimes impose regulatory constraints, the growth of the dual use sector also created significant industrial opportunities. These programs aim to mobilize tens of billions of euros in public and private investments in advanced technologies. For the Italian industrial economist, this is particularly relevant. Italy has strong capabilities in sectors closely linked to the well-used technologies, including aerospace and satellite technologies, robotics and automation, precision and engineering, microelectronics, artificial intelligence. According to data from Confindustria, the Italian aerospace and defense supply chain includes more than 4,000 companies and generates approximately 18 billion euros in annual revenues. Moreover, the transformation of the automotive sector is pushing several manufacturing companies to explore diversification opportunities in high technology markets, including dual use technologies. However, entering the dual-use ecosystem also requires companies to address a new set of regulatory challenges. These include export control regulations, international sanctions regimes, technology transfer restrictions, national security screening of foreign investments, failure to comply with export control rules can result in significant administrative and criminal penalties, as well as reputational damages and restrictions on international trade. For this reason, many companies are strengthening their export control governance frameworks, integrating legal compliance and technology management solutions. The rise of dual-use technology also highlights a broader transformation in global technology governance. Technology is no longer only a driver of economic growth. It has become a central element of geopolitical competition. As a result, we are witnessing a gravity expansion of regulatory frameworks aimed at controlling strategic technologies. Export controls, investment screening mechanisms, and technologies overnight policies are increasingly shaping the global innovation landscape. And dual-use technologies sit right at the center of this transformation. Understanding the legal framework governing these technologies is becoming essential, not only to mitigate regular risks, but also to identify new opportunities in emerging strategic markets. And this raises a few questions worth reflecting on. With the growing importance of defense-related technologies, reshape the European innovation ecosystem. Are companies preferred to navigate the increasingly complex expo control landscape? And how can we strike the right balance between technological innovation, economic competitiveness, and international security? If you have thoughts on this topic, feel free to reach out. If you enjoyed this episode, remember to subscribe to the podcast Dirito Digitale so you don't miss upcoming discussions on low technology and digital regulation. I'm Giulio Coraggio and this is Dirito Digitale.