AI and Analytics in Defense Market Size
| Study Period | 2019 - 2029 |
| Market Size (2024) | USD 9.09 Billion |
| Market Size (2029) | USD 16.35 Billion |
| CAGR (2024 - 2029) | 12.46 % |
| Fastest Growing Market | Asia-Pacific |
| Largest Market | North America |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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AI and Analytics in Defense Market Analysis
The Global Artificial Intelligence And Analytics In Defense Market size is estimated at USD 9.09 billion in 2024, and is expected to reach USD 16.35 billion by 2029, growing at a CAGR of 12.46% during the forecast period (2024-2029).
With military intelligence capabilities growing exponentially, the global defense sector has increasingly turned to AI and analytics to monitor vehicle and personnel parameters. Simultaneously, the substantial defense spending by major international powers has funneled significant investments into this sector, insulating it from severe market impacts.
AI and analytics stand as pivotal pillars in fortifying military forces. Leading nations are channeling investments into cutting-edge technologies to bolster their defense. AI-equipped military tools adeptly manage vast data streams, enhancing self-control and decision-making. The technology's applications in defense span from strategic decision-making and target recognition to combat simulation, threat monitoring, and cybersecurity.
However, the market is also facing some challenges despite this growth. Issues like a shortage of skilled professionals, hefty initial investments, and rising concerns over data privacy are poised to hinder the market's expansion, even as its potential for growth remains robust.
AI and Analytics in Defense Market Trends
Software Segment Expected to Exhibit Highest Growth During the Forecast Period
- The AI and analytics market's software segment is poised for significant growth in the coming years. AI software, integrated into computer systems, undertakes intricate operations. It gathers data from hardware, processes it within AI systems, and formulates intelligent responses. This software encompasses machine learning, virtual assistants, and speech recognition. The market's upswing is primarily fueled by escalating defense outlays and the evolution of sophisticated AI software and associated development kits. Notably, in 2024, global defense spending hit USD 2,440 billion, reflecting a robust 6.8% uptick from 2022.
- With mounting defense budgets globally, armed forces are increasingly directing funds toward cutting-edge AI and analytics solutions to combat contemporary battlefield challenges. For instance, in March 2024, the Indian Army unveiled its Signals Technology Evaluation and Adaptation Group (STEAG), a specialized unit dedicated to exploring futuristic technologies, including AI and machine learning, for military applications.
- Besides national initiatives, numerous OEMs are bolstering their investments in AI and analytics to cater to the expanding market. Take, for instance, Safran's move in June 2024, where it announced exclusive talks to acquire Preligens, a prominent player in AI for aerospace and defense, for a substantial USD 238 million. Preligens specializes in crafting advanced algorithms to automatically detect and identify military objects, often leveraging commercial and government satellite imagery. These collective efforts underscore the growing appetite for cutting-edge AI solutions in defense.
North America is Projected to Dominate the Market
- The market studied is witnessing robust growth in North America, primarily propelled by the substantial defense expenditure of the United States. The United States is intensifying its focus on R&D for cutting-edge defense technologies and is increasingly procuring AI and analytics-enabled devices for defense operations. Notably, in March 2024, the country sought a significant USD 32 billion for AI research, underlining its commitment to retaining global AI leadership, especially against China's advancements.
- With significant investments, the country is acquiring advanced AI and analytics solutions for defense applications. For example, in July 2024, Lockheed Martin secured a USD 4.6 million contract from the Defense Advanced Research Projects Agency (DARPA) to craft AI tools tailored for dynamic airborne missions. This endeavor aligns with DARPA's Artificial Intelligence Reinforcements (AIR) program, which focuses on refining modeling and simulation (M&S) techniques and deploying AI agents for live, multi-ship, beyond visual range (BVR) missions. Similarly, in May 2024, Palantir clinched a USD 480 million deal with the Army for its Maven Smart System prototype. Palantir's MAVEN software amalgamates data from diverse Intelligence Surveillance & Reconnaissance (ISR) systems, enabling it to pinpoint and identify enemy systems within the Area of Responsibility (AOR).
- The Army's main aim is to develop AI and machine learning solutions that bolster decision-making and support autonomous operations, ultimately enhancing the speed and scale of military actions. This surge in US government spending to bolster AI and analytics capabilities in defense is set to propel the market's growth during the forecast period.
AI and Analytics in Defense Industry Overview
The AI and analytics in defense market exhibit a semi-consolidated structure, with a handful of key players commanding substantial market shares. Some prominent market players are Northrop Grumman Corporation, THALES, BAE Systems PLC, RTX Corporation, and Lockheed Martin Corporation. Companies are bolstering their market presence through strategic partnerships and M&A activities. These initiatives help consolidate resources and expand market reach, giving them a competitive edge.
A prime example is Lockheed Martin Corporation's collaboration with Red Hat in October 2022. This partnership with the American tech firm Red Hat focuses on enhancing the AI capabilities of small military platforms. Lockheed Martin plans to leverage Red Hat's Device Edge to integrate cutting-edge software, like the Stalker unmanned aerial system. Such moves, coupled with a focus on introducing advanced technologies and nurturing OEM partnerships, are set to propel the market's growth in the coming years.
AI and Analytics in Defense Market Leaders
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Lockheed Martin Corporation
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Northrop Grumman Corporation
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THALES
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BAE Systems plc
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RTX Corporation
*Disclaimer: Major Players sorted in no particular order
AI and Analytics in Defense Market News
- June 2024: Helsing, IBM Deutschland, and Schonhofer Sales and Engineering, a consortium of German firms, unveiled the inaugural AI infrastructure for the Future Combat Air System (FCAS) program. The FCAS, a collaborative effort between France, Germany, and Spain, marks a significant stride in European next-generation aircraft development.
- January 2024: Japan and the United States inked a deal to kickstart collaborative research in artificial intelligence. The primary goal is to harness this technology for drones, which would complement Japan's upcoming fighter jet.
AI and Analytics in Defense Market Report - Table of Contents
1. INTRODUCTION
- 1.1 Study Assumptions
- 1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
- 4.1 Market Overview
- 4.2 Market Drivers
- 4.3 Market Restraints
-
4.4 Porter's Five Forces Analysis
- 4.4.1 Threat of New Entrants
- 4.4.2 Bargaining Power of Buyers/Consumers
- 4.4.3 Bargaining Power of Suppliers
- 4.4.4 Threat of Substitute Products
- 4.4.5 Intensity of Competitive Rivalry
5. MARKET SEGMENTATION
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5.1 By Offering
- 5.1.1 Hardware
- 5.1.2 Software
- 5.1.3 Services
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5.2 By Technology
- 5.2.1 Artificial Intelligence
- 5.2.2 Big Data Analytics
- 5.2.3 Other Technologies (Internet of Military Things (IoMT), Cybersecurity, and Immersive Technologies)
-
5.3 By Platform
- 5.3.1 Army
- 5.3.2 Navy
- 5.3.3 Airforce
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5.4 By Geography
- 5.4.1 North America
- 5.4.1.1 United States
- 5.4.1.2 Canada
- 5.4.2 Europe
- 5.4.2.1 Germany
- 5.4.2.2 United Kingdom
- 5.4.2.3 France
- 5.4.2.4 Russia
- 5.4.2.5 Rest of Europe
- 5.4.3 Asia-Pacific
- 5.4.3.1 India
- 5.4.3.2 China
- 5.4.3.3 Japan
- 5.4.3.4 South Korea
- 5.4.3.5 Rest of Asia-Pacific
- 5.4.4 Latin America
- 5.4.4.1 Brazil
- 5.4.4.2 Rest of Latin America
- 5.4.5 Middle East and Africa
- 5.4.5.1 United Arab Emirates
- 5.4.5.2 Saudi Arabia
- 5.4.5.3 Egypt
- 5.4.5.4 Rest of Middle East and Africa
6. COMPETITIVE LANDSCAPE
- 6.1 Vendor Market Share
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6.2 Company Profiles
- 6.2.1 BAE Systems PLC
- 6.2.2 RTX Corporation
- 6.2.3 THALES
- 6.2.4 Lockheed Martin Corporation
- 6.2.5 Northrop Grumman Corporation
- 6.2.6 IBM
- 6.2.7 Shield AI
- 6.2.8 Leidos Holding Inc.
- 6.2.9 SparkCognition Inc.
- 6.2.10 General Dynamics Corporation
- 6.2.11 Charles River Analytics Inc.
- *List Not Exhaustive
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
AI and Analytics in Defense Industry Segmentation
AI and analytics are revolutionizing the defense sector, enhancing performance and operational efficiency. Military forces worldwide are increasingly embracing AI-powered weaponry. Key technologies driving this transformation include the Internet of Things (IoT), artificial intelligence, robotics, and big data analytics.
AI and analytics in the defense market are segmented by offering, technology, platform, and geography. By offering, the market is classified into hardware, software, and services. By technology, the market is segmented into artificial intelligence, big data analytics, and other technologies. Other technologies include the Internet of Military Things (IoMT), cybersecurity, and immersive technologies. By platform, the market is segmented into army, navy, and airforce. The report also covers the market sizes and forecasts for AI and analytics in the defense market in major countries across different regions. For each segment, the market size is provided in terms of value (USD).
| By Offering | Hardware | |
| Software | ||
| Services | ||
| By Technology | Artificial Intelligence | |
| Big Data Analytics | ||
| Other Technologies (Internet of Military Things (IoMT), Cybersecurity, and Immersive Technologies) | ||
| By Platform | Army | |
| Navy | ||
| Airforce | ||
| By Geography | North America | United States |
| Canada | ||
| By Geography | Europe | Germany |
| United Kingdom | ||
| France | ||
| Russia | ||
| Rest of Europe | ||
| By Geography | Asia-Pacific | India |
| China | ||
| Japan | ||
| South Korea | ||
| Rest of Asia-Pacific | ||
| By Geography | Latin America | Brazil |
| Rest of Latin America | ||
| By Geography | Middle East and Africa | United Arab Emirates |
| Saudi Arabia | ||
| Egypt | ||
| Rest of Middle East and Africa |
AI and Analytics in Defense Market Research FAQs
How big is the Global Artificial Intelligence And Analytics In Defense Market?
The Global Artificial Intelligence And Analytics In Defense Market size is expected to reach USD 9.09 billion in 2024 and grow at a CAGR of 12.46% to reach USD 16.35 billion by 2029.
What is the current Global Artificial Intelligence And Analytics In Defense Market size?
In 2024, the Global Artificial Intelligence And Analytics In Defense Market size is expected to reach USD 9.09 billion.
Who are the key players in Global Artificial Intelligence And Analytics In Defense Market?
Lockheed Martin Corporation, Northrop Grumman Corporation, THALES, BAE Systems plc and RTX Corporation are the major companies operating in the Global Artificial Intelligence And Analytics In Defense Market.
Which is the fastest growing region in Global Artificial Intelligence And Analytics In Defense Market?
Asia-Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Global Artificial Intelligence And Analytics In Defense Market?
In 2024, the North America accounts for the largest market share in Global Artificial Intelligence And Analytics In Defense Market.
What years does this Global Artificial Intelligence And Analytics In Defense Market cover, and what was the market size in 2023?
In 2023, the Global Artificial Intelligence And Analytics In Defense Market size was estimated at USD 7.96 billion. The report covers the Global Artificial Intelligence And Analytics In Defense Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Global Artificial Intelligence And Analytics In Defense Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Defense AI Analytics Industry Report
Statistics for the 2024 Defense AI Analytics market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Defense AI Analytics analysis includes a market forecast outlook 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
