Using Terraform with AI: Workflows, Tools & Security

AI-generated code is helping teams ship to production faster, but not always more safely. The same tools that accelerate delivery can also introduce instability, compliance gaps, and security risks that many teams aren’t ready for.

This tension is clearly evident in infrastructure as code. If you’re managing Terraform across complex cloud environments, you’ve likely encountered manual tweaks, drift, and inconsistent updates that slow things down or cause outages.

AI can help by automating repetitive work, catching issues earlier, and optimizing infrastructure at scale. But it’s not a magic switch — you need the right workflows, guardrails, and tooling to make AI a reliable part of your IaC pipeline.

In this article, we’ll explore how to integrate AI into your Terraform workflows safely and efficiently. You’ll discover practical use cases, essential tools, and key security considerations — and see how platforms like Spacelift help teams harness AI-driven IaC with confidence and control.

What we’ll cover:

1. Why is AI transforming IaC?
2. How to use Terraform with AI for code assistance
3. Example: Infrastructure provisioning with Terraform and AI
4. Other ways AI can improve Terraform workflows
5. AI tools for working with Terraform
6. Security risks and compliance risks when using AI-generated IaC

Terraform users have long copied snippets from provider docs, tweaked variables, and hoped the plan would run cleanly. While this manual approach worked, it slowed teams down and made infrastructure prone to inconsistencies and security gaps, especially at scale.

AI is changing that dynamic entirely. By learning from past configurations, understanding provider schemas, and predicting intent, AI turns Terraform workflows into intelligent feedback loops. Instead of just writing HCL, you’re now collaborating with a system that reviews, suggests, and optimizes your code in real time.

Here’s what that looks like in practice:

• Faster module creation: Type “Create an S3 bucket with versioning and server-side encryption” in your IDE. AI writes the full module in seconds, complete with required arguments and default tags.
• Provider-aware fixes: Start typing aws_instance with the wrong AMI format, and AI will flag it instantly and suggest the correct AMI filter, pulling from the latest Terraform AWS provider schema.
• Smarter refactoring: Paste a 200-line main.tf file, and AI splits it into reusable modules (network, compute, storage) with proper inputs, outputs, and version pins, all ready for large teams.
• Built-in policy checks: AI scans your code against custom Rego policies or HashiCorp Sentinel rules, catching missing tags or unencrypted resources before terraform plan runs.

Let’s look at the core areas where AI is reshaping how Terraform engineers work:

1. Code generation and scaffolding

Large Language Models (LLMs) like those behind GitHub Copilot or Claude can take natural language input and translate it into valid Terraform HCL, automatically generating variables, locals, dependencies, and even provider configurations. This eliminates boilerplate for common resources such as VPCs, S3 buckets, or Kubernetes clusters, and helps enforce naming conventions, tagging standards, and provider version compatibility across your codebase. 

As a result, even non-experts can quickly prototype cloud architectures while staying aligned with best practices.

Example prompt:

“Create a production VPC in AWS with public and private subnets across three Availability Zones, NAT gateways for outbound traffic from private subnets, and route tables configured for internet access in public subnets.”

AI-generated Terraform (simplified):

While the exact output depends on the model, the initial scaffold typically gives a clean foundation to build upon: the model handles syntax and naming consistency while the engineer focuses on architecture.

2. Real-time code completion in IDEs

Tools like GitHub Copilot and Amazon Q Developer (the evolution of AWS CodeWhisperer) plug straight into VS Code, so as a platform engineer types a resource like aws_security_group "app_sg" , the editor can suggest ingress blocks with CIDR variables, sensible egress defaults, and revocable rules on the fly. 

That means less context-switching and fewer documentation trips, Terraform that stays in sync with provider schemas, and faster day-to-day authoring with fewer syntax and validation errors.

Live example suggestion:

In practice, these live suggestions feel like pair-programming with a Terraform-aware assistant that keeps your code valid as you type.

3. Refactoring and optimization for scale

At scale, managing hundreds of Terraform files can quickly create redundancy and drift. However, AI can now analyze entire repos, spot repeated resources, and propose cleaner modular structures using for_each and parameterized inputs. 

It can even flag over-provisioned instances and recommend rightsizing based on CloudWatch or cost data, effectively enforcing DRY principles automatically, improving maintainability across environments, and keeping resource usage efficient without the pain of constant manual audits.

Before (Repeated blocks):

AI-Suggested module:

Instead of repeated blocks, AI can propose a single parameterized module using for_each across environments, keeping tagging, versions, and instance types consistent. In multi-account setups, AI enforces uniform tagging and module versions.

4. Automated documentation

AI generates module READMEs with input/output tables, example usages, and dependency graphs, so teams experience less handoff friction, audits and reviews move faster, and documentation stays continuously in sync with the codebase. 

The VPC module section of a README file would look like this:

5. Error detection and plan interpretation

Terraform plan errors are often verbose, cryptic, and hard to scan under pressure. AI tools cut through that noise by translating them into plain, actionable insights. Instead of staring at something like: “Error: Invalid index — Subnet count (3) exceeds AZ data source length (2). Use slice or filter AZs,” you get a clear explanation of what broke and how to fix it.

The result is faster debugging cycles, less trial-and-error when correcting plans, and a noticeable boost in confidence before you hit “apply.” Teams spend less time deciphering stack traces and more time shipping changes they actually trust.

To see how AI and Terraform work together in practice, let’s walk through a realistic platform engineering scenario.

Your platform team needs to provision a secure, production-grade 3-tier web app on AWS. At a minimum, you need:

• VPC with public and private subnets across 3 AZs
• Application Load Balancer in public subnets
• EC2 Auto Scaling Group in private subnets
• RDS PostgreSQL in private subnets
• Least-privilege security groups and encryption

Traditionally, this means writing dozens of Terraform resources by hand, wiring up dependencies, and double-checking every security and compliance detail. With AI-assisted Terraform, the workflow becomes faster, more consistent, and easier to evolve.

Step 1: Seed the AI with an initial Terraform prompt

You start with a clear, infrastructure-focused prompt: 

“Generate modular Terraform for AWS 3-tier app: VPC with public/private subnets (3 AZs), ALB in public, ASG in private, RDS in private, SGs with minimal ports.”

This gives the AI enough context to:

• Target AWS
• Use Terraform best practices
• Respect network isolation
• Default to least-privilege security groups

Because the prompt is specific to Terraform on AWS, the model can generate infrastructure as code that’s close to deployable from the start.

Step 2: AI generates a modular Terraform project structure

In seconds, the AI returns a structured Terraform project instead of a single, messy file:

variables.tf
outputs.tf
networking.tf
compute.tf
database.tf
security.tf

Key snippet (compute.tf with ASG and Launch Config):

Step 3: Iterate with simple, high-level prompts

Instead of hunting down every resource block and flag by hand, you refine the infrastructure with short follow-up prompts:

• “Add KMS encryption for RDS and EBS.”
• “Include CloudWatch alarm for ASG CPU > 70%.”
• “Enable access logs for ALB to S3.”

The AI updates or appends Terraform blocks accordingly

Step 4: AI-assisted security and compliance review

Existing CI-integrated tools (e.g., Checkov, tfsec) can scan IaC for vulnerabilities and enforce CIS benchmarks via automated gates. However, AI-assisted reviews differ in that they are interactive and contextual.

They analyze code in real-time, suggest tailored fixes conversationally, and regenerate configurations iteratively, all within the same workflow. This eliminates context-switching, handles custom policies or edge cases beyond static rules, and catches issues during initial generation, not just post-commit.

A simple prompt might be:

“Scan this Terraform for vulnerabilities and apply CIS AWS benchmarks for ALB, EC2, and RDS.”

The AI could respond with findings like:

Issue	Rationale	Fix
ALB SG allows 0.0.0.0/0 on HTTP	Violates least-privilege; CI flags post-write, but AI prevents upfront.	Restrict to CloudFront/known IPs; AI updates SG rules inline.
RDS public access	Increases attack surface ; static tools detect later in pipeline.	Set publicly_accessible = false; AI ensures private subnet placement.
No deletion protection	Risks data loss; CI enforces via policy, AI adds proactively.	Add deletion_protection = true; AI suggests snapshot policies.

Outcome: Hours instead of days, with stronger defaults

In a traditional flow, designing, writing, reviewing, and securing this Terraform stack typically requires a platform team two to three days of focused work.

With AI-assisted Terraform for AWS:

• You generate a modular, production-ready baseline in minutes.
• You iterate on features and security using natural language prompts.
• You run AI-assisted reviews alongside static analysis tools.

The end result: a compliant, well-structured Terraform configuration ready to deploy in under 2 hours, with reduced manual effort, fewer missed edge cases, and a workflow that scales as your infrastructure grows.

AI can plug into almost every stage of the Terraform lifecycle, not just “generate some code for me.”

Here are several high-impact ways AI can improve Terraform workflows end to end:

Capability	How AI helps	Terraform integration
Drift detection	Compares tfstate vs. live state; highlights unauthorized changes	terraform plan -refresh-only + AI diff summaries
Policy compliance	Validates plans against OPA/Sentinel policies pre-apply	Spacelift AI generates OPA rules from natural language
Cost optimization	Analyzes plan JSON; suggests spot instances or Reserved Instances	Infracost + AI forecasting
Change impact analysis	Predicts downtime via dependency graphs	terraform graph + AI blast radius visualization

AI-powered infrastructure as code is already transforming how engineers build and manage cloud infrastructure. From intelligent code suggestions to automated policy enforcement, several tools are helping Terraform users work smarter and safer.

Here’s a closer look at the leading tools driving this evolution and how each contributes to smarter, safer, and faster IaC workflows.

• GitHub Copilot – AI-coding assistant inside IDEs like VS Code and JetBrains that understands Terraform syntax and intent. It generates Terraform blocks from natural language, auto-completes variables/resources/outputs, and suggests names and docs, so it’s ideal for teams that want fast, context-aware Terraform help without leaving their editor.
• Amazon Q Developer (formerly CodeWhisperer) – AWS-optimized assistant that generates Terraform aligned with AWS best practices, adds secure defaults like encryption and least privilege, and scans for issues, making it especially useful for AWS-heavy orgs that want secure, opinionated Terraform generation.
• Cody by Sourcegraph – Repo-aware AI that understands your whole codebase, finds and explains Terraform modules and dependencies, and helps with bulk refactors, which makes it a strong fit for platform teams running large, complex Terraform monorepos.
• Spacelift AI (Saturnhead AI + Intent) – An IaC orchestration platform (Terraform, OpenTofu, Pulumi, CloudFormation, etc.) that adds AI to operations and governance rather than just generating HCL. Saturnhead AI summarizes failed runs, analyzes logs, and suggests fixes, while Spacelift enforces OPA/Rego policies, detects drift, and runs compliant pipelines. Spacelift Intent lets teams provision non-critical infrastructure from natural language under the same policy and audit guardrails, making it a strong fit for secure, automated IaC workflows end to end.
• Checkov and Terrascan – AI-enhanced IaC security scanners that detect Terraform misconfigurations and policy breaches and plug into CI/CD, making them a natural choice for security and compliance teams enforcing standards across every repo and environment.

Cloud-specific accelerators

While general-purpose AI coding assistants are incredibly powerful, each major cloud provider has started releasing Terraform-optimized AI accelerators that are deeply aware of their own services, best practices, pricing models, and latest feature releases. These tools go beyond generic HCL generation and bake in cloud-native intelligence from the outset.

1. AWS Bedrock + Terraform integration

Amazon Q Developer (formerly CodeWhisperer Professional) and the new Amazon Q in IDE now include deep Terraform awareness:

• Generates full architectures using the latest AWS service features (e.g., EC2 Instance Connect Endpoint, VPC Lattice, FSx for NetApp ONTAP) the day they launch.
• Automatically applies Well-Architected Framework and AWS Foundations Benchmark defaults.
• Suggests cost-optimized instance families and purchasing options (Spot, Savings Plans, Reserved Instances) with real-time pricing context.

2. Google Cloud Vertex AI Codey + Terraform

Google’s Codey models are trained extensively on Google Cloud and HashiCorp documentation:

• Generates Vertex AI workloads, AlloyDB clusters, GKE Autopilot configurations, and Cloud Run services with correct IAM bindings and VPC-SC constraints.
• Understands Google’s recommended hierarchical resource model (folders → projects → resources) and can scaffold Organization Policy constraints directly in Terraform.
• Offers one-click conversion of Console-clickops into reusable Terraform modules.

3. Azure OpenAI Service + Azure Terraform Assistant (in preview)

Microsoft is embedding GPT-4-turbo with Azure-specific system prompts into VS Code and Azure Developer CLI:

• Generates Bicep ↔ Terraform bidirectional conversions on the fly.
• Applies Azure Policy and Landing Zone (ALZ) requirements automatically.
• Suggests Azure-native cost governance (budgets, reservations, Azure Hybrid Benefit) directly in code comments.

4. Cloud-native CI/CD platforms built for AI-augmented Terraform

Some platforms are going further by coupling cloud-specific AI with full lifecycle governance:

• Spacelift + Cloud AI integrations Spacelift’s newest Blueprints natively pull in Amazon Q, Google Codey, or Azure OpenAI suggestions during the Plan stage, then immediately validate them against your OPA/Sentinel policies and drift detectors. This means AI can propose the absolute latest cloud feature, but nothing reaches Apply until it satisfies enterprise guardrails.
• Terraform Cloud / Enterprise “AI Assist” (beta) HashiCorp itself is rolling out provider-aware generative assistance inside Terraform Cloud, leveraging the same Atlas index that powers the public registry to recommend verified, up-to-date modules for every cloud.

These cloud-specific accelerators dramatically reduce the “hallucination tax” you sometimes pay with general LLMs. When the model already knows the latest service limits, tagging requirements, regional availability, and pricing nuances of its own cloud, the resulting Terraform is not only faster to write; it’s materially safer and cheaper to run.

Here are the main risk categories to watch for when using AI with Terraform:

Risk	Description	Real-world impact
Insecure defaults	AI may allow 0.0.0.0/0 ingress	Data breaches (e.g., 2023 Capital One misconfig)
Sensitive data exposure	Secrets in prompts sent to public LLMs	Credential leakage
Hallucinated configurations	Invalid arguments (e.g., deprecated count in modules)	Apply failures, state corruption
Module supply chain	Suggests unvetted registry modules	Backdoors (e.g., 2024 Terraform registry incidents)
Over-reliance	Blind deployment without review	Outages from misunderstood logic

Mitigation strategies

You don’t have to choose between speed and safety. To make AI-assisted Terraform secure and compliant:

• Treat AI like a junior engineer – Every AI-generated Terraform change should go through peer review before merge. No exceptions.
• Shift security left with automated checks – Run tools like Checkov, tfsec, or Spacelift policy checks on every PR to catch insecure patterns before they ever reach terraform apply.
• Enforce guardrails with policy-as-code – Use OPA, Sentinel, or similar to encode org-wide rules (no 0.0.0.0/0, no unapproved regions, required tags, etc.) so unsafe AI suggestions are blocked automatically.
• Protect secrets at all costs – Keep keys and credentials in Vault, AWS Secrets Manager, or Azure Key Vault, and keep them out of prompts. Redact, mock, or tokenize anything sensitive.
• Prefer private or self-hosted AI for sensitive environments – Where possible, run AI assistants inside your VPC or on private models, so prompts and code never leave your security boundary.
• Stage before prod, always – Apply AI-generated IaC to dev or staging first, validate behavior, and only then promote to production.
• Log and audit everything – Track who requested AI changes, who reviewed them, and who deployed them. This makes incident response and compliance audits far easier.
• Whitelist approved modules – Lock down which Terraform modules can be used, and block anything outside your approved, vetted list in CI.
• Train engineers on AI’s limits – Make sure teams understand that AI can speed up Terraform — but can’t replace fundamentals like least privilege, blast radius analysis, and careful reviews.

Spacelift turns AI-assisted Terraform from a clever prototype into a robust, production-ready system by embedding intelligence, governance, and collaboration at every step.

Use Spacelift’s policy-as-code engine to turn simple rules (“All RDS instances must use KMS encryption” or “Never allow ingress from 0.0.0.0/0”) into enforceable OPA policies that gate every run — with AI features to help explain failures and keep policies effective at scale.

Manage policies, stacks, and environments entirely as code using the Spacelift Terraform provider, keeping your guardrails version-controlled and auditable.

With Spacelift, you unlock:

• Stack dependencies to orchestrate AI-generated Terraform alongside Ansible, Pulumi, or Kubernetes in a single, PR-driven pipeline
• Blueprints for developer self-service — spin up compliant environments in seconds, with built-in approvals
• Contexts to centralize secrets, variables, and lifecycle hooks across all stacks
• Drift detection with optional auto-reconciliation to keep your infrastructure aligned with your desired state
• Spacelift Intent for natural language infrastructure provisioning — describe what you need in plain English and have it provisioned under your existing policies and audit trails, without writing Terraform
• Saturnhead AI (Enterprise): click Explain on failed runs to get a plain-English summary, pinpointed failure cause, and code-level fix suggestions across init, plan, and apply phases
  

Fintechs such as Airtime Rewards use Spacelift to enforce compliance at CI/CD speed — blocking violations before apply, diagnosing failures in seconds, and maintaining full audit trails. The result: dramatically faster delivery, fewer compliance surprises, and infrastructure that increasingly “fixes itself” through policy-driven automation.

Ready to let AI write the code while we maintain its security and compliance? Start free today or book a demo with our engineering team.

AI is transforming Terraform from a static infrastructure-as-code tool into an intelligent, proactive assistant capable of provisioning, optimizing, and securing resources. This shift isn’t about replacing engineers; it is about embedding intelligence right inside the workflow of infrastructure automation.

In this post, we have seen how tools like Spacelift AI, GitHub Copilot, and CodeWhisperer simplify the process of writing compliant, cost-efficient infrastructure code. We also saw the importance of maintaining strong guardrails like human review, policy enforcement, and security scanning before deploying any AI-generated IaC configurations.

In essence, success lies in combining AI’s speed with human expertise. When automation and judgment come together, teams can achieve faster, safer, and cheaper infrastructure without losing control or trust.