Artificial Intelligence (AI) in Aerospace and Defense Market Report 2026

The artificial intelligence (AI) in aerospace and defense market size has grown rapidly in recent years. It will grow from $29.27 billion in 2025 to $33.31 billion in 2026 at a compound annual growth rate (CAGR) of 13.8%. The growth in the historic period can be attributed to increased adoption of ai for predictive maintenance in aircraft and defense systems, advancements in autonomous drone and intelligent sensor technology, growth in ai-based threat detection and surveillance solutions, investments in simulation and training using ai, integration of ai in avionics and navigation modules.

The artificial intelligence (AI) in aerospace and defense market size is expected to see rapid growth in the next few years. It will grow to $55.3 billion in 2030 at a compound annual growth rate (CAGR) of 13.5%. The growth in the forecast period can be attributed to expansion of AI-driven autonomous mission planning and execution, adoption of ai-enabled real-time decision support systems, increased integration of ai with multi-domain defense operations, growth in managed ai services and modernization programs, rising demand for ai-powered situational awareness and control systems. Major trends in the forecast period include expansion of autonomous combat and support systems, growth in ai-driven threat detection and target recognition, increasing use of predictive maintenance for fleet optimization, rise of ai-enhanced mission planning and decision support, adoption of intelligent navigation and guidance systems.

The rising defense expenditures are expected to drive the growth of the artificial intelligence (AI) in aerospace and defense market in the coming years. Defense spending is increasing primarily due to escalating geopolitical tensions, as nations enhance their military capabilities and invest heavily in advanced technologies to protect national interests amid regional and global conflicts. Higher defense expenditures support research, development, and deployment of AI technologies that improve efficiency, accuracy, and speed in aerospace and defense operations, resulting in stronger security, reduced human risk, and optimized resource use. For instance, in April 2024, the Stockholm International Peace Research Institute (SIPRI), a Sweden-based independent research organization, reported that world military expenditure rose for the ninth consecutive year in 2023, reaching $2.44 trillion, a 6.8% increase from 2022. This illustrates how rising defense expenditures are fueling the growth of the AI in aerospace and defense market.

Key companies in the AI aerospace and defense market are focusing on integrating AI-powered design tools and simulations, such as embedded AI, to enhance situational awareness, operational efficiency, and real-time decision-making. Embedded AI integrates artificial intelligence algorithms directly into onboard hardware and electronic systems, enabling autonomous data processing and intelligent responses without reliance on cloud systems. For example, in June 2024, Safran Electronics and Defense, a France-based aerospace and defense systems provider, launched the Advanced Cognitive Engine (ACE), an embedded AI solution supporting defense platforms with real-time target detection, adaptive environmental analysis, and decision-support capabilities. This technology improves mission effectiveness, automation, and operator performance across land, air, and naval applications.

In September 2024, Safran S.A., a France-based provider of high-technology systems for aviation, defense, and space, acquired Preligens for $254 million (€220 million). This acquisition gives Safran access to Preligens’ advanced AI analytics platform, capable of processing high-resolution imagery, full-motion video, and acoustic signals. The move strengthens Safran’s AI-driven surveillance, reconnaissance, and decision-support capabilities while accelerating digital transformation and improving operational efficiency in aerospace and defense. Preligens S.A.S. is a France-based provider of AI solutions for aerospace, defense, and government applications.

Major companies operating in the artificial intelligence (AI) in aerospace and defense market are Microsoft Corporation, Airbus SE, Raytheon Technologies Corporation, Lockheed Martin Corporation, International Business Machines Corporation, Intel Corporation, General Dynamics Corporation, Northrop Grumman Corporation, Honeywell International Inc., General Electric Co., Anduril Industries Inc., BAE Systems plc, NVIDIA Corporation, Thales Group, Leonardo S.p.A., Indra Sistemas SA, Palantir Technologies Inc., Helsing GmbH, Rebellion Defense, Shield AI.

North America was the largest region in the artificial intelligence (AI) in aerospace and defense market in 2025. The regions covered in the artificial intelligence (AI) in aerospace and defense 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 semiconductor components, sensors, processors, and communication modules have raised production costs for AI-enabled aerospace and defense systems, slowing adoption in regions dependent on imported electronics, particularly in Asia-Pacific and Europe. Hardware-heavy segments such as processors, sensors, and communication equipment face the highest cost pressure, while platform-level AI integration timelines are extended due to supply chain disruptions. However, tariffs have also encouraged domestic manufacturing and accelerated investments in localized AI hardware production, creating long-term growth opportunities for regional suppliers.

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

Artificial intelligence (AI) in aerospace and defense refers to the use of advanced machine learning algorithms, data analytics, and automation technologies to improve the efficiency, safety, and effectiveness of aerospace and defense operations. It involves AI systems performing tasks that traditionally require human intelligence, such as decision-making, threat detection, predictive maintenance, navigation, mission planning, and autonomous control.

The key offerings of artificial intelligence (AI) in the aerospace and defense market include hardware, software, and services. Hardware consists of the physical components and computing infrastructure that support AI-enabled systems, including processors, sensors, embedded systems, and edge devices designed for complex data processing and real-time analytics in mission-critical environments. Deployment types include cloud-based and on-premises solutions, implemented across multiple platforms such as land, naval, airborne, and space systems. Key technologies include machine learning, natural language processing (NLP), computer vision, context-aware computing, robotics, and big data analytics, which are applied in predictive maintenance, surveillance and monitoring, mission systems, cybersecurity, data analytics, autonomous systems, navigation and guidance systems, and other applications.

The countries covered in the artificial intelligence (ai) in aerospace and defense 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 aerospace and defense market consists of revenues earned by entities by providing services such as system integration, training and simulation, consulting, managed services, technical support, and modernization services. 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 aerospace and defense market also includes sales of autonomous drones, intelligent sensors, avionics modules, radar detectors, navigation controllers, and surveillance cameras. 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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