Artificial Intelligence (AI) in Defense Logistics Market Report 2026

The artificial intelligence (AI) in defense logistics market size has grown rapidly in recent years. It will grow from $2.3 billion in 2025 to $2.73 billion in 2026 at a compound annual growth rate (CAGR) of 18.4%. The growth in the historic period can be attributed to adoption of automated inventory management, implementation of predictive maintenance, integration of AI in route planning, growing defense supply chain complexity, adoption of autonomous vehicles for logistics.

The artificial intelligence (AI) in defense logistics market size is expected to see rapid growth in the next few years. It will grow to $5.31 billion in 2030 at a compound annual growth rate (CAGR) of 18.1%. The growth in the forecast period can be attributed to expansion of ai-driven warehouse automation, development of real-time asset tracking systems, integration with ai-enabled procurement platforms, adoption of blockchain for secure logistics, increased use of robotic logistics systems in combat zones. Major trends in the forecast period include increasing joint and coalition interoperability requirements for ai-enabled defense logistics platforms, shift toward performance-based and outcome-based logistics contracts in military supply chains, growing focus on supply chain resilience and redundancy for mission-critical defense operations, expansion of public-private partnerships between defense organizations, primes, and ai-focused smes for logistics modernization, rising investment in specialized training, doctrine, and change management for ai-enabled logistics decision-making.

The rapidly increasing digital transformation is expected to propel the growth of artificial intelligence (AI) in the defense logistics market going forward. Digital transformation refers to the integration of digital technologies into all areas of business operations, fundamentally changing how organizations function and deliver value. The growing adoption of digital transformation is primarily driven by the need for greater operational efficiency in an increasingly interconnected global environment, as organizations aim to streamline processes, reduce costs, and maintain competitiveness through advanced technological capabilities. AI-powered systems enhance defense logistics by optimizing supply chain management, predicting equipment maintenance needs, and improving resource allocation through real-time data analysis and automated decision-making. For instance, in November 2023, according to the Central Digital and Data Office, a UK-based government agency responsible for digital transformation across UK government departments, the overall size of the Government Digital and Data profession increased by 19% from April 2022 to April 2023. Therefore, rapid digital transformation is driving the growth of artificial intelligence (AI) in the defense logistics market.

Key companies operating in artificial intelligence (AI) in the defense logistics market are focusing on developing advanced solutions such as AI-based supply chain management to ensure the timely delivery of critical military supplies. AI-based supply chain management utilizes artificial intelligence to detect, evaluate, and mitigate potential disruptions in military supply chains while maintaining continuous and efficient operations. It also enables proactive decision-making by forecasting risks and optimizing logistics in real time. For instance, in March 2025, the Defense Logistics Agency, a US-based Department of Defense logistics combat support agency, developed an AI tool to monitor supply chain risk as part of its strategic transition toward predictive supply chain operations. The system identifies unreliable suppliers, predicts bottlenecks, and optimizes procurement by using multiple risk assessment models to detect counterfeit, non-conforming, or overpriced items, thereby helping prosecute vendors who compromise the supply chain and ensuring mission readiness.

In July 2025, BigBear.ai, a US-based provider of mission-ready AI solutions and services for defense, national security, and critical infrastructure, partnered with DEFCON AI to enhance next-generation military readiness through AI-driven analytics and simulation. The partnership aims to strengthen situational awareness, decision-making, and joint logistics capabilities by co-developing AI-powered modeling, simulation, and data integration solutions for complex defense operations. DEFCON AI is a US-based provider of artificial intelligence (AI)-based defense logistics tools such as ARTIV.

Major companies operating in the artificial intelligence (AI) in defense logistics market are Microsoft Corporation, The Boeing Company, RTX Corporation, Lockheed Martin Corporation, International Business Machines Corporation (IBM), Northrop Grumman Corporation, SAP SE, BAE Systems plc, Safran S.A., Thales Group, L3Harris Technologies Inc., Leidos Holdings Inc., Booz Allen Hamilton Holding Corporation, Rheinmetall AG, Rafael Advanced Defense Systems Ltd., Palantir Technologies Inc., Anduril Industries Inc., Shield AI Inc., Helsing GmbH, Charles River Analytics Inc., DEFCON AI Inc.

North America was the largest region in the artificial intelligence (AI) in the defense logistics market in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the artificial intelligence (AI) in defense logistics market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

Tariffs on semiconductors, advanced sensors, data processing hardware, and robotics components are increasing procurement and integration costs across AI-enabled defense logistics solutions, particularly for hardware-intensive segments such as autonomous vehicles, sensor networks, AI-enabled drones, and data processing hardware. Software and cloud-based deployments are relatively less affected, but system integration services, cybersecurity services, and deployment and implementation services face delays and higher project costs when hardware imports are restricted. Regions dependent on cross-border sourcing especially in North America, Europe, and parts of Asia-Pacific are most exposed, affecting applications like fleet management, transportation management, and real-time asset tracking. At the same time, tariffs are encouraging localization, regional manufacturing, and strategic stockpiling, which can strengthen long-term supply security and stimulate domestic innovation in AI-based defense logistics capabilities.

The artificial intelligence (AI) in defense logistics market research report is one of a series of new reports that provides artificial intelligence (AI) in defense logistics market statistics, including artificial intelligence (AI) in defense logistics industry global market size, regional shares, competitors with a artificial intelligence (AI) in defense logistics market share, detailed artificial intelligence (AI) in defense logistics market segments, market trends and opportunities, and any further data you may need to thrive in the artificial intelligence (AI) in defense logistics industry. The artificial intelligence (AI) in defense logistics market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

Artificial intelligence (AI) in defense logistics involves the application of advanced algorithms and data analytics to improve decision-making, coordination, and operational efficiency within military supply chains. It processes vast amounts of data in real time to forecast demand, optimize resource distribution, and enhance overall readiness. By automating key processes, AI increases accuracy, accelerates logistics operations, and minimizes human error, resulting in greater agility and mission effectiveness.

The primary components of AI in defense logistics include software, hardware, and services. Software encompasses programs and applications that analyze data, streamline operations, and support strategic decision-making across supply chain activities. Deployment modes include on-premises and cloud-based systems, supporting applications such as inventory management, fleet management, supply chain optimization, transportation management, and maintenance and repair. These technologies are utilized by various defense branches, including the army, navy, air force, and others.

The countries covered in the artificial intelligence (ai) in defense logistics market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The artificial intelligence (AI) in the defense logistics market consists of revenues earned by entities by providing services such as predictive analytics and demand forecasting, warehouse automation, cybersecurity for logistics networks, route optimization and mission planning, real-time asset tracking, and procurement and resource allocation. The market value includes the value of related goods sold by the service provider or included within the service offering. The artificial intelligence (AI) in the defense logistics market also includes sales of autonomous vehicles, sensor networks, data processing hardware, AI-enabled drones, and robotic logistics systems. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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