Don't Trust the Label: License Laundering in AI Supply Chains

The rapid proliferation of machine learning model reuse has transformed the AI ecosystem into a highly interconnected supply chain. Traditional compliance tools and static reports struggle to navigate these massive, multi-hop dependency networks. To address this, we present AI Supply Chain Galaxy (AISCG), an interactive 3D visual analytics system for model provenance and compliance auditing. AISCG maps models into a 3D spatial layout, integrating explicit structural dependencies with a rule-based compliance engine. It supports multi-scale exploration, from global community detection to localized, path-aware lineage tracing. We demonstrate its efficacy through an ecosystem-scale empirical analysis of 908,449 models from Hugging Face. Our findings reveal a concerning landscape: 55.46% of models exhibit compliance risks or metadata conflicts/omissions. We also identified distinct risk patterns, including a 56.67% license omission rate in adapter derivations and an 8.05% "license drift" rate in fine-tuning. Through a case study on the complex Llama model family, we show how AISCG empowers analysts to intuitively trace inherited restrictive terms and identify root causes across deep topological networks, significantly reducing the cognitive load of compliance auditing.

As generative AI faces intensifying legal challenges, the machine learning community has increasingly relied on post-hoc mitigation -- especially machine unlearning and inference-time guardrails -- to argue for compliance. This paper argues that such post-hoc mitigation methods cannot retroactively cure liability from unlawful acquisition and training, because compliance hinges on data lineage, not the outputs. Our argument has three parts. First, unauthorized copying/ingestion can be a legally complete completed act, and model weights may operate as fixed copies that retain training-derived expressive value, making later filtering beside the point for infringement. Second, contract and tort/unfair-competition rules -- via licenses, terms of service, and anti-free-riding principles -- can independently restrict access and use, often bypassing copyright defenses (e.g., fair use or TDM exceptions). Third, since value from protected inputs can persist in weights, remedies such as unjust enrichment and disgorgement may require stripping gains and, in some cases, reaching the model itself. We therefore argue for a shift from Post-Hoc Sanitization to verifiable Ex-Ante Process Compliance.

Pretrained machine learning (ML) models help developers build ML-intensive software systems without training models from scratch. However, model repositories often provide incomplete machine-readable documentation about model provenance, licenses, datasets, limitations, and external references, creating transparency and governance gaps across the AI supply chain. Artificial Intelligence Bills of Materials (AIBOMs) address these gaps by documenting AI artifacts, including models, metadata, licenses, datasets, model-card information, and external references. Taking public Hugging Face (HF) model repositories as a case study, this paper empirically investigates AIBOM completeness, defined as the extent to which repositories provide AIBOM-relevant information for machine-readable AI supply-chain documentation. We examine approximately 97.5K AIBOM artifacts to assess the extent to which generated AIBOMs: (i) contain required structural and metadata fields, (ii) represent model identity, license, and external-reference information, (iii) capture model-card documentation such as datasets, limitations, safety-risk assessment, and environmental information, and (iv) vary in documentation coverage across repository and artifact characteristics such as task, license availability, dataset declaration, model family, and paper reference. Results indicate that generated AIBOMs provide complete coverage of required AIBOM structure but limited AI-specific documentation completeness. Required fields are fully represented, but model-card, metadata, responsible-use, environmental, limitation, and meaningful-description fields remain weakly represented or missing across generated artifacts. Our findings motivate improved model-card practices, repository-level traceability, and automated AIBOM validation to advance the generation and adoption of more complete AIBOMs.