By: John J. Stulman, JD CEO and Founder, InnovaSafe, Inc.
Artificial intelligence is changing how software is developed. Developers increasingly use AI-assisted coding tools to generate source code, tests, scripts, documentation, infrastructure configurations, and other components of modern applications.
But AI-generated code raises an important question for organizations that depend on software escrow:
If AI helps create the software, does traditional source code escrow still provide adequate protection?
The answer depends less on who—or what—wrote the code and more on whether the escrow deposit contains the materials necessary to recreate and maintain the application.
That makes software escrow verification increasingly important.
AI Changes Software Development, Not the Purpose of Software Escrow
The fundamental purpose of software escrow has not changed.
A software provider deposits source code and other agreed materials with an independent escrow agent. If a release condition specified in the escrow agreement occurs, the escrow materials may be released to an authorized beneficiary.
AI does not eliminate that protection.
What AI changes is the development environment surrounding the deposited software.
Developers can now create and modify code more quickly. AI coding tools can generate functions, configuration files, tests, scripts, and even significant portions of applications.
The result may be a development environment that changes faster and relies on more components than traditional escrow practices anticipated.
The Real Question: Can the Software Be Recreated?
Whether a developer personally wrote every line of code is not the primary escrow question.
A more important question is:
Can the deposited materials be used to recreate the software?
A modern software application may depend on much more than its proprietary source code. Required materials can include:
- Source code
- Open-source libraries
- Third-party dependencies
- Build scripts and instructions
- Development tools
- Configuration files
- Database schemas
- Deployment scripts
- Infrastructure-as-Code
- CI/CD configurations
- Documentation
- Version information
AI-assisted development does not necessarily make an escrow deposit unusable. It does, however, reinforce the need to understand exactly what an application requires to build and operate.
AI Makes Current Deposits Even More Important
Software escrow has always faced a practical challenge: software changes.
AI-assisted development can accelerate that process.
If developers produce and modify software more frequently, an escrow deposit made months earlier may no longer represent the current production application.
For this reason, organizations should consider how frequently escrow materials are updated.
Repository integrations and automated deposit processes can help keep escrow materials synchronized with ongoing development without requiring developers to manually prepare every deposit.
For AI-assisted development, keeping the deposit current may become just as important as establishing the escrow agreement itself.
Source Code Alone May Not Be Enough
This issue extends beyond AI.
Modern software frequently relies on open-source packages, third-party libraries, cloud infrastructure, containers, APIs, databases, and external services.
For SaaS applications, the challenge can be even greater because the provider may control the infrastructure and operational environment in addition to the application itself.
An escrow deposit therefore should reflect the technology required to support the application—not simply contain a folder labeled “source code.”
This is one reason SaaS escrow and broader technology escrow arrangements may include infrastructure information, deployment materials, database information, configuration, and other components necessary to address business continuity requirements.
What About AI Code Provenance?
AI-assisted development also raises questions about where software components originated.
Organizations increasingly want greater visibility into the open-source and third-party components contained within their software. Software Bills of Materials, commonly called SBOMs, can help identify components, libraries, and dependencies within an application.
But an SBOM should not be confused with verification.
An SBOM provides an inventory of software components. Verification addresses a different question: Can the deposited materials actually be used as intended?
An SBOM can provide valuable visibility into the components and dependencies within an application, but it should not be treated as proof that an escrow deposit is complete or recoverable. CISA’s SBOM guidance recognizes that dependency information may be incomplete and requires identification of “Known Unknowns” when all dependencies are not listed. An SBOM can help identify what software contains; technical verification addresses a different question: whether the deposited materials can actually be built and used as intended.
For escrow purposes, these approaches can complement one another.
Verification Becomes More Important, Not Less
AI-generated code does not make software escrow obsolete.
It strengthens the argument for technical verification.
A basic escrow arrangement establishes independent custody of the agreed materials. Verification can provide additional assurance that those materials are complete and usable.
Depending on the level of assurance required, InnovaSafe can perform several levels of verification.
Level 1 — Deposit Analysis
InnovaSafe reviews the deposited materials and identifies whether expected components and documentation are present.
Level 2 — Deposit Compile Test
InnovaSafe recreates the software development environment, compiles the source files and modules, links required libraries, recreates executable code, and documents the results.
Level 3 — Binary Comparison Test
InnovaSafe compares executable files created during verification with executable files used by the beneficiary to determine whether they match at the binary level.
Level 4 — Full Usability Test
InnovaSafe sets up, installs, and configures the deposited materials. Using predetermined test scripts provided by the parties, engineers can perform functional testing and document the setup and installation process.
The appropriate level depends on the application, its complexity, and the business risk the escrow arrangement is intended to address.
AI-Generated Software Still Needs Human Assurance
AI can help developers write software faster, but speed does not answer the fundamental business continuity question.
If a critical software provider could no longer support its application tomorrow, would the software escrow deposit contain what your organization actually needs?
That question was important before generative AI.
It is even more important now.
Independent escrow, current deposits, and appropriate technical verification provide organizations with a practical way to address that risk without requiring customers to control or routinely access a software provider’s proprietary source code.
Software Escrow Is Evolving With Software Development
Software escrow does not need to be replaced because developers use AI.
It needs to reflect how modern software is actually developed, built, deployed, and maintained.
For organizations relying on mission-critical software, that means looking beyond whether source code has simply been deposited. They should consider whether deposits remain current, whether required dependencies and supporting materials are included, and whether an appropriate level of independent verification has been performed.
Since 2001, InnovaSafe has provided independent software, SaaS, and technology escrow services and technical verification for mission-critical applications.
Contact InnovaSafe to discuss how your software escrow and verification requirements should address modern development environments, including AI-assisted software development.