Artificial intelligence is fundamentally transforming military capability and warfare. This analysis draws primarily from the United Kingdom’s experience whilst incorporating relevant parallels from the United States, NATO and the European Union. It highlights how post–Cold War defence de-investment mirrors the dangerous complacency of Britain’s interwar “Ten-Year Rule”. Russia’s invasion of Ukraine has shattered assumptions about modern warfare. The conflict demonstrates both the return of large-scale state conflict and the role of AI-enabled systems. China’s military modernisation further underscores the urgency of this transformation. Ukraine demonstrates AI’s impact across military domains. Unmanned systems are reshaping the economics and conduct of warfare. Hardware increasingly serves as a commodity platform for software-defined capabilities. These can be rapidly upgraded and adapted in response to battlefield conditions. AI enables faster decision-making, enhanced targeting and more effective resource allocation. Significant institutional barriers impede this transformation. Procurement systems remain oriented towards traditional hardware platforms. Defence budgets face constraints whilst incumbent contractors lack software expertise. Sclerotic acquisition processes struggle to accommodate the rapid iteration central to AI development. Recommendations include procurement reform, enhanced support for innovative small and medium-sized enterprises and software-centric acquisition approaches. Nations that effectively harness AI for military capabilities may gain decisive strategic advantages. Those that fail risk strategic irrelevance and compromised deterrence.