Artificial Intelligence in Military Market – By Offering, By Installation Type, By Technology, By Application, By Platform - Global Forecast, 2025 – 2034

Artificial Intelligence in Military Market Size

The global artificial intelligence in military market size was valued at USD 10.4 billion in 2024 and is estimated to grow at 13.4% CAGR from 2025 to 2034. The growing military spending is a key factor for the growth of market as the military forces focus on fast analysis of the data to make quick decisions in operations.
 

According to the Stockholm International Peace Research Institute (SIPRI), militaries are spending huge amount in optimizing the operation effectiveness. The U.S. military spending in 2023 was around USD 916 billion followed my other countries such as China, Russia, and India. The North Atlantic Alliance (NATO) highlights that AI is enhancing the power of making decisions that involve computation of vast complex data. The increasing collaboration among the companies to provide advanced AI military application enables seamless communication between systems and operators.
 

The rising integration of AI into autonomous systems for military operation is growing rapidly. The military is creating demand in the market for improving combat situations as well as surveillance and efficiency of logistic handling. Companies are focusing on developing next-generation autonomous systems in drones which cater to autonomous strike missions with higher precision.
 

The focus of the military in intelligent reconnaissance, and target acquisition is shaping the path for the integration of AI in the military applications. For instance, in November 2023, the U.S. Department of Defense (DoD) gave contract to Kodiak Robotics to develop and automate the U.S. Army ground vehicles under the US Army Robotic Combat Vehicles (RCV) program.
 

Artificial Intelligence (AI) in military refers to the technologies which are used in military for the enhancement of capabilities to gather data and execution of operations accordingly. AI has been helping in the military sector to improve situational awareness, and its usage helps in sorting and making informed decisions.
 

Artificial Intelligence in Military Market Trends

• The growing focus on predictive analysis is a key trend in the market where the militaries are integrating AI and machine learning in their existing systems to derive informed and quick real-time decisions. To improve cybersecurity in military sectors, the deployment of Generative AI helps in creating scenarios, perform analysis and enables secure communication. It together helps in predicting cyberattacks.
   
• There is rising demand for advanced image intelligence solutions in the military settings which in turn is leading to the growth of AI in the military market. The advanced images help in enhancing the security of the area. For instance, in February 2025, SATIM and Thales made strategic collaboration for the introduction of advanced AI-driven image intelligence solutions. The partnership encircles the enhancement of Synthetic Aperture Radar (SAR) based intelligence capabilities.
   

Artificial Intelligence in Military Market Analysis

Based on offerings, the AI in military market is divided into hardware, software, and services.
 

• The hardware market was valued at 4.2 billion in the year 2024. The demand of autonomous systems such as unmanned aerial vehicles (UAVs), unmanned ground vehicles (UGVs) and robotic soldiers marks the growing need for intricate AI built-in features in the hardware for enhancing the traditional navigation systems and increase the threat detection capabilities.
   
• The software market is anticipated to grow at a CAGR of 15.7% in the forecast period.  The software defined approach is growing significantly as it reduces the need for updating the expensive hardware and can be seamlessly done through upgrading AI software. In Bravo Hackathon conducted under the U.S. Air Force Operations Command in the year 2023, witnessed a team which developed the AI application which potentially identifies the enemy object whether in sea or in land. This reflects the growing software capabilities in the military sector.
   

Based on installation type, the artificial intelligence in military market is bifurcated into new installation and upgradation.
 

• The new installation market is projected to grow and reach a value of USD 22.9 billion by the year 2034. The military and armed forces are inclining towards new installation of the AI tools and systems for the purpose of developing their command centers. The new installation is gaining traction in the market as the military is improving the defense infrastructure. Companies are installing AI-enabled instruments in fighter jets such as Radar Warning Receiver (RWR).
   
• The upgradation market is projected to grow at a CAGR of 18.1% in the forecast period. The military sector with already built in system seeks for specific upgradation into the legacy system which ensures the AI enabled features are present and functioning through seamless integration. The upgradation trend is higher in cyber defense where AI featured tools are deployed into the system to track the cyber threats and built robust preventive measures to protect the sensitive information used in military sector.
   

Based on technology, the artificial intelligence in military market is bifurcated into machine learning, natural language processing, context-aware computing, computer vision, Intelligent virtual agent (Iva) /virtual agents, and others.
 

• The machine learning market was valued at USD 4.7 billion in the year 2024. Machine learning (ML) is gaining momentum in the market as military uses ML to improve its decision making in the military operations. The algorithms of ML are widely used in cybersecurity, intelligence analysis, and autonomous decision making. This reflects the growing use of ML in the military sectors.
   
• The computer vision market is expected to grow at a CAGR of 17.5% in the forecast period. The increasing need for real-time automated analysis of the battlefield data highlights the computer vision requirement in the current market dynamics. The moder warfare environment seeks new AI-enabled features which enable image processing, and remote sensing data analysis which in turn creates the demand of advanced computer vision.
   

Based on application, the artificial intelligence in military market is bifurcated into warfare platforms, cybersecurity, logistics & transportation, surveillance & situational awareness, command & control, battlefield healthcare, simulation & training, threat detection, information processing, and others.
 

• The warfare platforms market is predicted to grow and reach a value of USD 9.4 billion by the year 2034. The warfare platform is getting popular as the platform enables the integration of new advanced autonomous systems on the military vehicles which provide precise details and awareness of the battlefield situation. This is creating vital opportunities for warfare platform developers to integrate AI features and help in enhancing the military advanced tactical systems.
   
• The cybersecurity market is anticipated to grow at a CAGR of 17.9% in the forecast period. With the growing cyber threats, the market witness’s growth in introducing cybersecurity across the region. There are new dedicated military centers to address the vulnerabilities in cyberspace. For instance, in July 2024, NATO launched its Cyber Defense Center to improve network security. These developments focus on national security and prevention from cybercrime.
   

Based on platform, the artificial intelligence in military market is bifurcated into airborne, land, naval and space.
 

• The land market is expected to grow and reach a value of USD 14.3 billion by 2034. As AI is significantly integrating in every field, it is gaining popularity in the military sector and is helping in the transformation of the land military operation. Robotic Combat Vehicles (RCV) and AI assisted components are becoming resourceful in land operations of the military.
   
• The space market is projected to grow at a CAGR of 19.2% in the forecast period. The military sector is actively progressing through the development of AI to cater the Space Situational Awareness (SSA). AI is making significant strides by enhancing Intelligence, Surveillance, and Reconnaissance (ISR) of the space environment and providing seamless connection through specific miliary CubeSats.
   

• In 2024, the U.S. AI in military market was valued at USD 3.7 billion. The country made progress with the new AI enabled feature in the military application. With the rising partnership between AI platforms and defense technology companies, the market is witnessing growth in the U.S. For instance, in April 2024, Andruil joined hands with OpenAI to develop advanced AI solutions for the purpose of safeguarding national security.
   
• German AI in military market is anticipated to grow at a CAGR of 15.8% in the forecast period. The country has a strong focus on research and development and makes strategic collaboration to equip the forces with the latest technology. In February 2025, the Germany based Helsing joined hands with Mistral to enhance military technology using AI.
   
• The artificial intelligence in military market for China was valued at USD 1 billion in 2024. China is rapidly advancing AI in the military market by focusing on autonomous weapons, and AI-enabled command centres. The Chinese government’s strong investment in defense AI and collaboration with research institutions further accelerates the AI adoption. Regulatory backing ensures seamless deployment, positioning China as a dominant player in AI-powered defense technologies.
   
• The market for Artificial Intelligence (AI) in Military for Japan is expected to grow at CAGR of 19.4%. Japan is enhancing its AI capabilities in its defense sector by investing heavily in autonomous systems, and cybersecurity. Its 2024 policy emphasizes human oversight, focusing AI on intelligence, and decision-making support. With a USD 55 billion defense budget, Japan is investing in AI surveillance systems, aligning with U.S.-led responsible AI initiatives.
   
• By 2034, The market for Artificial Intelligence (AI) in Military for South Korea is expected to hold a value of USD 665 million. South Korea is expanding AI applications in the military by developing autonomous surveillance systems, and smart defense platforms. The government's focus on technological innovations and strategic collaborations with AI innovators accelerates adoption. Country’s regulatory frameworks ensure the secure implementation, positioning South Korea as a key player in AI defense solutions.
   

Artificial Intelligence in Military Market Share

The Artificial Intelligence (AI) in the military sector is rapidly advancing, driven by global defense leaders and emerging tech firms. The top 5 companies in the market are Lockheed Martin, Northrop Grumman, Raytheon Technologies, BAE Systems, and Thales which together constitute a market share of 52% in 2024. Key strategies by the players include investing in AI-powered surveillance systems and autonomous weapon systems, which enhance situational awareness and reduce operation risks.
 

Furthermore, developing portable AI-powered systems for the real-time battlefield analysis is gaining demand. Collaborations among defense agencies, technology providers, and research institutes are essential for expanding AI integration and ensuring smooth adoption in various military applications. The regulatory support for ethical and secure AI systems helps accelerate deployment and trust. These efforts by the companies address the increasing demand for AI-driven defense solutions along with strengthening their positions in the evolving military technological environment.
 

Artificial Intelligence in Military Market Companies

Top 5 companies operating in the artificial intelligence in military industry are:

• Lockheed Martin
• Northrop Grumman
• Raytheon Technologies
• BAE Systems
• Thales
   

Lockheed Martin is advancing Artificial Intelligence (AI) in the military sector by investing heavily in AI-powered autonomous systems, predictive analytical maintenance, and enhanced mission planning tools. The company is focussing on integrating AI across defense platforms to develop decision making and operation efficiency. Collaborations between defense agencies and technology partners enable smooth AI adoption, while regulatory compliance ensures secure deployment, fortifying Lockheed Martin's top rank in delivering advanced AI solutions for national security.
 

Northrop Grumman is driving the AI innovation in military market by developing AI-enabled surveillance, reconnaissance, and threat detection systems. The company is focussing on enhancing its autonomous capabilities in unmanned systems and improving real-time data analysis for mission-critical operations.
 

Artificial Intelligence in Military Industry News:

• In March 2025, Booz Allen Hamilton, and Shield Artificial Intelligence (AI) came into partnership to provide the Department of Defense (DoD) with AI enabled military solution. The aim revolves around providing AI control systems and autonomy into uncrewed systems.
   
• In September 2024, BAE systems FAST Labs secured a contract worth USD 4 million to develop the advanced air combat autonomous system under the Artificial Intelligence Reinforcement (AIR) program issued by Defense Advanced Research Projects Agency (DARPA).
   
• In September 2024, General Dynamics Information Technology (GDIT) acquired Iron EagleX, Inc. to leverage the expertise of AI, software solutions and cybersecurity capabilities.
   

The artificial intelligence in military market research report includes an in-depth coverage of the industry with estimates and forecast in terms of revenue in USD Million from 2021 – 2034 for the following segments:

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Market, By Offering

• Hardware
• Software
  • Cloud
  • On-premises 
• Services
  • Deployment & integration
  • Upgrades & maintenance
  • Software support
  • Others

Market, By Installation Type

• New installation
• Upgradation

Market, By Technology

• Machine learning
• Natural language processing
• Context-aware computing
• Computer vision
• Intelligent virtual agent (Iva) /virtual agents
• Others

Market, By Application

• Warfare platforms
• Cybersecurity
• Logistics & transportation
• Surveillance & situational awareness
• Command & control
• Battlefield healthcare
• Simulation & training
• Threat detection
• Information processing
• Others

Market, By Platform

• Airborne
  • Fighter aircraft
  • Special mission aircraft
  • Helicopters
  • Unmanned aerial vehicles (UAV) 
• Land
  • Military fighting vehicles (MFV)
  • Unmanned ground vehicles (UGV)
  • Weapons systems
  • Headquarter & command centers
  • Dismounted soldier systems
• Naval
  • Ships
  • Submarines
  • Unmanned marine vehicles (UMVs)
• Space
  • CubeSats
  • Satellites

The above information is provided for the following regions and countries:

• North America 
  • U.S.
  • Canada
• Europe 
  • Germany
  • UK
  • France
  • Spain
  • Italy
  • Netherlands
• Asia Pacific 
  • China
  • India
  • Japan
  • Australia
  • South Korea
• Latin America 
  • Brazil
  • Mexico
  • Argentina
• Middle East and Africa 
  • Saudi Arabia
  • South Africa
  • UAE