Market Insights

The artificial intelligence in military market was estimated at USD 6.58 billion in 2022 and is likely to grow at a CAGR of 13.1% during 2023-2029 to reach USD 15.62 billion in 2029.

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Market Dynamics

Introduction

Artificial Intelligence (AI) is increasingly being used in military applications, from autonomous weapons systems to logistics and planning tools. AI can help to improve the speed, accuracy, and efficiency of military operations, while also reducing the risk of human casualties. Autonomous weapons systems, such as drones and unmanned vehicles, can be used for reconnaissance, surveillance, and targeted strikes, while AI-powered logistics tools can help to optimize supply chains and manage troop movements.

However, the use of AI in military applications also raises ethical and legal concerns, particularly around the use of lethal autonomous weapons systems and the potential for unintended consequences.

The expansion of the artificial intelligence market within the military industry can be explained by the growing investment in the creation of AI-integrated systems, along with the increasing adoption of cloud-based applications and high-performance computers. Nevertheless, the market's growth is being hindered by protectionist policies and the absence of standardized protocols, resulting in restricted access to military platforms.

Market Drivers

Increasing government expenditure on defense to improve AI capabilities

As per the Stockholm International Peace Research Institute (SIPRI), the worldwide military expenditure in 2022 was evaluated at USD 2,113 billion, indicating a growth of 3.6% compared to the previous year's spending. This escalation can be attributed to the upsurge in conflicts between nations, resulting in the reinforcement of their defense capabilities.

For example, in 2022, more than ten significant international conflicts took place, such as the Russia-Ukraine War, Syrian Civil War, the Saudi Arabia-Yemen conflict, US-Iran tensions, India-China tensions, and China-Taiwan tensions.

These types of conflicts often lead to an augmented acquisition of advanced weapon systems that utilize AI technology, as well as the integration of novel technologies into pre-existing systems to enhance their effectiveness.

Numerous governments have established specialized departments or agencies that focus on devising, commencing, and incorporating AI capabilities into existing equipment, as well as developing new capabilities. The National Science and Technology Council in the US, the Strategic Council for AI Technologies in Japan, and the AI Council in the UK are a few examples of such agencies.

In January 2021, the UK AI Council presented a roadmap to the UK Government, proposing that it increase sustainable public sector investment in AI and invest in The Alan Turing Institute (UK) to promote development and secure strategic leadership for the UK in AI research.

The UK Government's Research & Development Roadmap from July 2020 also features comparable initiatives. The report notes that the Defence and Security Accelerator (DASA) is collaborating closely with the Institute for Security Science and Technology (ISST) at Imperial's White City Campus in the UK to unite the government, academia, industry, and small and medium-sized enterprises (SMEs) to explore creating the next wave of solutions for security and defense challenges.

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Increasing Threats of Cyber Attacks

The defense industry worldwide faces a constant threat of cyberattacks. For instance, in September 2019, SolarWinds, a US technology company, experienced a hack that exposed sensitive data of numerous hospitals, universities, and US government agencies.

Another notable incident occurred in October 2020, when the FBI and the US Cyber Command revealed that a North Korean group had hacked think tanks, individual experts, and government entities of the US, Japan, and South Korea to illegally obtain intelligence, including nuclear policies.

Current cybersecurity technology falls short in terms of addressing advanced ransomware and spyware threats. The above-mentioned SolarWinds hack was discovered when FireEye, a cybersecurity provider, was investigating one of its hacks.

These incidents highlight the growing significance of advanced cybersecurity capabilities. Artificial intelligence-based cybersecurity solutions can be trained to independently collect data from various sources, analyze the data, correlate it with signals of cyberattacks, and take appropriate actions, making them a valuable deployment.

Segment Analysis

By Platform Type

 Space segment of the Artificial Intelligence in military market to grow at the highest CAGR over the forecast period."

Based on the platform, the space segment of the Artificial Intelligence in military market is to grow at the highest CAGR over the forecast period. The space segment of the AI in military market is anticipated to experience the highest CAGR during the forecast period, based on the platform. The space AI segment is made up of CubeSats and satellites. AI systems for space platforms consist of multiple satellite subsystems that serve as the foundation for various communication systems. The incorporation of AI into space platforms enables efficient communication between spacecraft and ground stations.

By Offering Type

"Software segment of the artificial intelligence in military market to witness the highest CAGR during the forecast period."

By offering the software segment of the artificial intelligence in military market to witness the highest CAGR during the forecast period. The software segment is expected to experience the highest CAGR during the forecast period based on offering. Technological advancements in the field of AI have led to the creation of advanced AI software and related software development kits.

The AI software integrated into computer systems is responsible for performing complex operations. It combines data received from hardware systems and processes it in an AI system to generate an intelligent response. The Software segment is projected to witness the highest CAGR because of the importance of AI software in fortifying the IT infrastructure to prevent security breaches.

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Regional Insights

"North American market to contribute the largest share from 2023 to 2029 in the artificial intelligence in military market."

The North American region, particularly the US and Canada, are essential countries for market analysis. This region is expected to lead the market between 2023 and 2029 due to the increased investments in AI technologies by the countries in the region.

The US is leading this market, investing heavily in AI systems to maintain its combat superiority and reduce the risk of potential threats on computer networks. The US plans to increase its spending on AI in the military to gain a competitive edge over other countries.

The US is recognized as one of the primary manufacturers, exporters, and users of AI systems globally, with the strongest AI capabilities. Key manufacturers of AI systems in the US include Lockheed Martin, Northrop Grumman, L3Harris Technologies, Inc., and Raytheon. The new defense strategy of the US highlights an increase in AI spending to include advanced capabilities in existing defense systems of the US Army to counter incoming threats.

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Key Players

The following are the key players in the artificial intelligence in military market:

• BAE Systems Plc
• Boeing Company
• Caci International Inc.
• Charles River Analytics
• Darktrace Limited
• General Dynamics Corporation
• Honeywell International Inc.
• International Business Machines Corp (IBM)
• Lockheed Martin Corporation
• Leonardo S.P.A (Leonardo)
• Leidos Holdings Inc(Leidos)
• Lharris Technologies, Inc.
• NVIDIA Corporation
• Northrop Grumman Corporation
• Rafael Advanced Defense Systems Ltd.
• Raytheon Technologies Corporation
• Rheinmetall AG
• Shield AI
• Science Applications International Corp (Saic)
• SAAB AB
• Soar Technologies Inc.
• Sparkcognition Inc
• Safran SA
• Dji Technology
• Thales Group

Note: The above list does not necessarily include all the top players in the market.

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Report Features

This report provides market intelligence in the most comprehensive way. The report structure has been kept such that it offers maximum business value. It provides critical insights into market dynamics and will enable strategic decision-making for existing market players as well as those willing to enter the market. The following are the key features of the report:

• Market structure: Overview, industry life cycle analysis, supply chain analysis.
• Market environment analysis: Growth drivers and constraints, Porter’s five forces analysis, SWOT analysis.
• Market trend and forecast analysis.
• Market segment trend and forecast.
• Competitive landscape and dynamics: Market share, Service portfolio, New Product Launches, etc.
• COVID-19 impact and its recovery curve
• Attractive market segments and associated growth opportunities.
• Emerging trends.
• Strategic growth opportunities for the existing and new players.
• Key success factors.

Market Segmentation

This report studies the market, covering a period of 12 years of trend and forecast. The report provides detailed insights into the market dynamics to enable informed business decision-making and growth strategy formulation based on the opportunities present in the market.

The artificial intelligence in military market is segmented into the following categories:

By Offering Type 

• Hardware
• Software
• Services

By Application Type 

• Warfare Platforms
• Cybersecurity
• Logistics & Transportation
• Surveillance & Situational Awareness
• Command & Control
• Battlefield Healthcare 
• Simulation & Training
• Threat Monitoring
• Information Processing 

By Technology Type 

• Machine Learning
• Natural Language Processing
• Context-Aware Computing
• Computer Vision 
• Intelligent Virtual Agent

By Platform Type 

• Airborne
• Land
• Naval
• Space

By Installation Type

• New Installation
• Upgradation 

By Region

• North America (Country Analysis: The USA, Canada, and Mexico)
• Europe (Country Analysis: Germany, France, The UK, Russia, and the Rest of Europe)
• Asia-Pacific (Country Analysis: China, India, Australia, South Korea, and the Rest of Asia-Pacific)
• Rest of the World (Country Analysis: Saudi Arabia, Brazil, and Others)

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Research Methodology

• This strategic assessment report, from Stratview Research, provides a comprehensive analysis that reflects today’s functional artificial intelligence in military market realities and future market possibilities for the forecast period.
• The report segments and analyzes the market in the most detailed manner to provide a panoramic view of the market.
• The vital data/information provided in the report can play a crucial role for market participants as well as investors in the identification of the low-hanging fruits available in the market as well as to formulate growth strategies to expedite their growth process.
• This report offers high-quality insights and is the outcome of a detailed research methodology comprising extensive secondary research, rigorous primary interviews with industry stakeholders, and validation and triangulation with Stratview Research’s internal database and statistical tools.
• More than 1,000 authenticated secondary sources, such as company annual reports, fact books, press releases, journals, investor presentations, white papers, patents, and articles, have been leveraged to gather the data.
• We conducted more than 15 detailed primary interviews with market players across the value chain in all four regions and industry experts to obtain both qualitative and quantitative insights.

Report Customization Options

With this detailed report, Stratview Research offers one of the following free customization options to our respectable clients:

Company Profiling

• Detailed profiling of additional market players (up to three players)
• SWOT analysis of key players (up to three players)

Competitive Benchmarking

• Benchmarking of key players on the following parameters: product portfolio, geographical reach, regional presence, and strategic alliances.

Custom Research: Stratview Research offers custom research services across the sectors. In case of any custom research requirement related to market assessment, competitive benchmarking, sourcing and procurement, target screening, and others, please send your inquiry to [email protected].

Recent Developments

• In February 2023, Northrop Grumman and the U.S. Navy carried out a joint interoperability test that involved connecting airborne platforms with naval assets.
• In February 2023, Thales and LuxCarta entered into a partnership to offer AI-powered solutions for military intelligence and cartography.
• In January 2023, Thales and NukkAI entered into a partnership to develop an AI-based data fusion solution for military applications.
• In October 2022, Lockheed Martin and Red Hat collaborated to deliver AI innovation at the edge on Lockheed Martin military platforms.