Artificial Intelligence (AI) and Analytics in Defense - Global Strategic Business Report

The global market for Artificial Intelligence (AI) and Analytics in Defense was valued at US$8.8 Billion in 2024 and is projected to reach US$17.9 Billion by 2030, growing at a CAGR of 12.5% from 2024 to 2030. This comprehensive report provides an in-depth analysis of market trends, drivers, and forecasts, helping you make informed business decisions. The report includes the most recent global tariff developments and how they impact the Artificial Intelligence (AI) and Analytics in Defense market.

Global Artificial Intelligence (AI) and Analytics in Defense Market - Key Trends & Drivers Summarized

Why Is AI Becoming a Strategic Necessity in Modern Defense Operations?

Artificial Intelligence (AI) is rapidly transforming the global defense landscape by enabling armed forces to process information, make decisions, and respond to threats faster and more accurately than ever before. As modern warfare becomes increasingly complex and data-driven, traditional human-centric decision-making models are proving inadequate for processing the massive volumes of data generated from satellites, sensors, intelligence networks, and battlefield communications. AI technologies are bridging this gap by providing advanced data analytics, pattern recognition, predictive modeling, and autonomous decision-making capabilities. In strategic planning and mission execution, AI helps defense organizations identify enemy movements, assess risks, and simulate combat scenarios with unparalleled speed and precision. AI also enhances command and control functions by integrating disparate information sources into a unified situational awareness picture, allowing for real-time threat assessment and rapid response. Furthermore, AI-powered systems are being deployed in unmanned aerial vehicles, autonomous ground systems, and naval platforms to conduct reconnaissance, surveillance, target acquisition, and even combat support. This reduces the need to put human lives at risk in high-threat environments. Cybersecurity, logistics, maintenance, and supply chain optimization are additional areas where AI is delivering tangible benefits by automating routine tasks and enabling predictive maintenance to prevent equipment failures. Defense ministries across the world are recognizing the strategic value of AI, with major powers investing heavily in R&D and operational integration. The pace at which AI is being adopted highlights its critical role not only in strengthening national security but also in redefining the fundamental architecture of defense systems.

How Are Data Analytics Tools Enhancing Intelligence, Surveillance, and Operational Readiness?

Advanced analytics are playing a central role in defense by turning raw data into actionable insights that enhance intelligence, surveillance, and operational efficiency across all military branches. In the era of information warfare, defense agencies are inundated with data from a vast array of sources including satellite imagery, drone footage, social media, human intelligence, and cyber networks. Traditional analytical methods are often slow and resource-intensive, making them insufficient for timely decision-making in fast-moving scenarios. This is where modern analytics tools, powered by AI and machine learning algorithms, deliver significant advantages. These systems can sift through terabytes of structured and unstructured data to detect anomalies, predict enemy behavior, and support real-time decision-making in high-pressure environments. In intelligence and surveillance applications, analytics platforms can identify patterns that may signal emerging threats or uncover hidden networks by correlating data across multiple domains. In logistics, predictive analytics can forecast supply needs, optimize transportation routes, and reduce mission downtime. When applied to maintenance operations, data analytics supports condition-based and predictive maintenance models that increase the operational readiness of aircraft, vehicles, and naval assets. Defense forces are also leveraging analytics for human resource management, helping optimize personnel deployment, training schedules, and performance assessments. These tools are increasingly being integrated with digital twins and simulation models to test mission strategies and battlefield scenarios in virtual environments before real-world deployment. The combination of AI and analytics is reshaping how defense forces collect, interpret, and act on information, making military operations more agile, informed, and mission-focused.

How Do National Strategies, Allied Cooperation, and Industry Innovation Influence Adoption?

The adoption of AI and analytics in defense is being shaped by a blend of national security strategies, collaborative defense initiatives, and rapid innovation within the defense technology industry. Governments around the world are embedding AI integration into their national defense doctrines, recognizing its potential to deliver both tactical and strategic superiority. Countries such as the United States, China, Russia, and members of the European Union are developing dedicated AI defense roadmaps, allocating funding to military AI research, and forming specialized command units tasked with digital transformation. Interoperability and standardization are also key factors, especially among allied nations and defense blocs such as NATO, which are working to ensure that AI-enabled systems can function seamlessly across coalition forces. These collaborative efforts are giving rise to joint development programs, knowledge-sharing platforms, and combined exercises that test AI applications in real-world military scenarios. Simultaneously, the defense industry is driving innovation by developing dual-use technologies that can be rapidly adapted for military use. Defense contractors and technology firms are creating advanced platforms that incorporate AI and analytics in everything from battlefield communications to autonomous systems and electronic warfare. Startups and non-traditional defense suppliers are also contributing through agile development cycles and cutting-edge solutions that challenge the dominance of legacy providers. Ethical considerations, transparency in AI algorithms, and compliance with international laws are becoming critical elements in procurement and deployment decisions, ensuring responsible use of emerging technologies. National and international regulatory frameworks are beginning to reflect these concerns, creating a more structured environment for adoption. As the ecosystem for AI and analytics in defense continues to mature, the convergence of policy, collaboration, and innovation is accelerating the deployment of these technologies at both strategic and tactical levels.

What Is Driving the Long-Term Growth of AI and Analytics in the Global Defense Sector?

The growth in the AI and analytics market within the global defense sector is driven by a confluence of strategic, technological, and operational imperatives. One of the primary growth drivers is the growing complexity of modern threats, including cyberattacks, drone warfare, information manipulation, and hybrid warfare strategies that require rapid, data-driven responses. The need to maintain decision dominance in such contested environments compels defense agencies to invest in intelligent systems that can process and interpret information faster than human operators. As defense budgets expand in key regions, particularly in Asia-Pacific, the Middle East, and North America, more resources are being directed toward advanced technologies that promise transformative battlefield capabilities. Military modernization programs are placing AI and analytics at the core of next-generation defense infrastructure, emphasizing real-time intelligence, automated command chains, and autonomous systems. Another critical driver is the volume and variety of data generated by modern sensors, satellites, and networked weapons systems, which can only be effectively harnessed through sophisticated analytics platforms. Cloud computing and edge processing capabilities are enabling secure, low-latency data analysis in the field, while 5G networks enhance communication speed and reliability. In addition, the shift toward multi-domain operations involving land, air, sea, space, and cyber dimensions necessitates integrated command and control systems that rely heavily on AI-driven insights. Human-machine teaming, augmented decision-making, and autonomous mission execution are emerging as foundational concepts for future defense strategies. The growing availability of commercial AI tools, the emergence of defense-specific data platforms, and the increasing role of private-sector innovation are further fueling market expansion. Together, these factors ensure a sustained and accelerating trajectory for the integration of AI and analytics across the global defense landscape.

Scope of the Report

The report analyzes the Artificial Intelligence (AI) and Analytics in Defense market, presented in terms of market value (USD). The analysis covers the key segments and geographic regions outlined below:

• Segments: Technology (Artificial Intelligence Technology, Big Data Analytics Technology, Other Technologies); Offering (Hardware Offering, Software Offering, Services Offering); Platform (Army, Navy, Airforce).
• Geographic Regions/Countries: World; United States; Canada; Japan; China; Europe (France; Germany; Italy; United Kingdom; Spain; Russia; and Rest of Europe); Asia-Pacific (Australia; India; South Korea; and Rest of Asia-Pacific); Latin America (Argentina; Brazil; Mexico; and Rest of Latin America); Middle East (Iran; Israel; Saudi Arabia; United Arab Emirates; and Rest of Middle East); and Africa.

Key Insights:

• Market Growth: Understand the significant growth trajectory of the Artificial Intelligence Technology segment, which is expected to reach US$12.2 Billion by 2030 with a CAGR of a 14.2%. The Big Data Analytics Technology segment is also set to grow at 9.0% CAGR over the analysis period.
• Regional Analysis: Gain insights into the U.S. market, valued at $2.4 Billion in 2024, and China, forecasted to grow at an impressive 17.1% CAGR to reach $3.8 Billion by 2030. Discover growth trends in other key regions, including Japan, Canada, Germany, and the Asia-Pacific.

Why You Should Buy This Report:

• Detailed Market Analysis: Access a thorough analysis of the Global Artificial Intelligence (AI) and Analytics in Defense Market, covering all major geographic regions and market segments.
• Competitive Insights: Get an overview of the competitive landscape, including the market presence of major players across different geographies.
• Future Trends and Drivers: Understand the key trends and drivers shaping the future of the Global Artificial Intelligence (AI) and Analytics in Defense Market.
• Actionable Insights: Benefit from actionable insights that can help you identify new revenue opportunities and make strategic business decisions.

Key Questions Answered:

• How is the Global Artificial Intelligence (AI) and Analytics in Defense Market expected to evolve by 2030?
• What are the main drivers and restraints affecting the market?
• Which market segments will grow the most over the forecast period?
• How will market shares for different regions and segments change by 2030?
• Who are the leading players in the market, and what are their prospects?

Report Features:

• Comprehensive Market Data: Independent analysis of annual sales and market forecasts in US$ Million from 2024 to 2030.
• In-Depth Regional Analysis: Detailed insights into key markets, including the U.S., China, Japan, Canada, Europe, Asia-Pacific, Latin America, Middle East, and Africa.
• Company Profiles: Coverage of players such as Accenture, BAE Systems, Boeing, C3.ai, Charles River Analytics and more.
• Complimentary Updates: Receive free report updates for one year to keep you informed of the latest market developments.

Some of the 36 companies featured in this Artificial Intelligence (AI) and Analytics in Defense market report include:

• Accenture
• BAE Systems
• Boeing
• C3.ai
• Charles River Analytics
• Cisco Systems
• DARPA (Defense Advanced Research Projects Agency)
• Dell Technologies
• General Dynamics
• Harris Corporation
• IBM
• Intelligence Advanced Research Projects Activity (IARPA)
• Lockheed Martin
• ManTech
• Microsoft
• Northrop Grumman
• Palantir Technologies
• Raytheon Technologies
• SAIC
• Thales Group

This edition integrates the latest global trade and economic shifts into comprehensive market analysis. Key updates include:

• Tariff and Trade Impact: Insights into global tariff negotiations across 180+ countries, with analysis of supply chain turbulence, sourcing disruptions, and geographic realignment. Special focus on 2025 as a pivotal year for trade tensions, including updated perspectives on the Trump-era tariffs.
• Adjusted Forecasts and Analytics: Revised global and regional market forecasts through 2030, incorporating tariff effects, economic uncertainty, and structural changes in globalization. Includes historical analysis from 2015 to 2023.
• Strategic Market Dynamics: Evaluation of revised market prospects, regional outlooks, and key economic indicators such as population and urbanization trends.
• Innovation & Technology Trends: Latest developments in product and process innovation, emerging technologies, and key industry drivers shaping the competitive landscape.
• Competitive Intelligence: Updated global market share estimates for 2025 (E), competitive positioning of major players (Strong/Active/Niche/Trivial), and refined focus on leading global brands and core players.
• Expert Insight & Commentary: Strategic analysis from economists, trade experts, and domain specialists to contextualize market shifts and identify emerging opportunities.