Artificial Intelligence and Analytics in Defence Market Report 2026

The artificial intelligence and analytics in defence market size has grown rapidly in recent years. It will grow from $12.22 billion in 2025 to $13.95 billion in 2026 at a compound annual growth rate (CAGR) of 14.2%. The growth in the historic period can be attributed to adoption of predictive analytics for threat detection, integration of machine learning in surveillance operations, deployment of autonomous defense systems, investments in data analytics infrastructure, use of AI for logistics optimization.

The artificial intelligence and analytics in defence market size is expected to see rapid growth in the next few years. It will grow to $23.49 billion in 2030 at a compound annual growth rate (CAGR) of 13.9%. The growth in the forecast period can be attributed to expansion of edge computing-enabled ai solutions, integration of real-time mission analytics, adoption of ai-driven threat intelligence services, growth in AI-assisted system integration services, development of high-performance sensor arrays for predictive operations. Major trends in the forecast period include expansion of predictive analytics for mission readiness, increased use of autonomous decision-support tools, growth in ai-driven surveillance and threat identification, adoption of logistics optimization using real-time analytics, integration of multi-domain data for enhanced situational awareness.

The increasing adoption of unmanned systems is expected to drive the growth of the artificial intelligence and analytics in defense market going forward. Unmanned systems are vehicles or machines that operate without a human physically on board and can function autonomously using onboard sensors and artificial intelligence or be controlled remotely. Their use is rising because they can perform tasks in hazardous or hard-to-reach environments, ensuring operations are completed safely and efficiently without risking human lives. Artificial intelligence and analytics in defense support unmanned systems by enabling autonomous decision-making, enhancing real-time data processing, and improving mission efficiency and accuracy in complex or dangerous conditions. For instance, in June 2025, according to a UK government report, a UK-based agency announced a record $460 million (£350 million) investment to expand drone deliveries to Ukraine, increasing the target from 10,000 in 2024 to 100,000 in 2025. Therefore, the growing use of unmanned systems is driving the artificial intelligence and analytics in defense market.

Key companies operating in the artificial intelligence and analytics in defense market are focusing on innovation and integration, such as multi-source intelligence, to improve situational awareness, enable real-time decision-making, and provide actionable insights across defense operations. Multi-source intelligence refers to the collection, analysis, and integration of information from multiple sources to provide a comprehensive understanding of situations and support defense decision-making. For instance, in February 2025, EDGE Group PJSC, a UAE-based technology company, launched a next-generation AI-powered geospatial intelligence platform at IDEX 2025 to enhance situational awareness and decision-making by combining advanced analytics, real-time data processing, and AI capabilities. This platform delivers actionable insights for defense and security operations, improving operational efficiency, strategic decision-making, and high-precision intelligence while demonstrating EDGE’s commitment to technological innovation in defense.

In January 2025, Tidal Security Inc., a US-based cybersecurity company, acquired Zero-Shot Security, Inc. for an undisclosed amount. This acquisition enables Tidal Security Inc. to strengthen its cybersecurity and defense offerings by integrating Zero-Shot Security’s advanced AI and analytics solutions, providing improved threat detection, real-time decision-making, and comprehensive security insights. Zero-Shot Security, Inc. is a US-based AI-driven cybersecurity company specializing in predictive threat detection and real-time network protection, supporting the defense sector by enhancing cyber resilience and safeguarding critical defense infrastructure.

Major companies operating in the artificial intelligence and analytics in defence market are Google LLC, Microsoft Corporation, Siemens AG, RTX Corporation, Lockheed Martin Corporation, International Business Machines Corporation, Oracle Corporation, General Dynamics Corporation, Northrop Grumman Corporation, SAP SE, BAE Systems PLC, Hewlett Packard Enterprise Company, Thales S.A., Leidos Holding Inc., Booz Allen Hamilton Holding Corporation, Rheinmetall Aktiengesellschaft, Palantir Technologies Inc., Shield AI Inc., BigBear.ai Holdings Inc., Charles River Analytics Inc., HawkEye 360 Inc., Faculty Science Limited, Avathon Inc.

North America was the largest region in the artificial intelligence and analytics in defence market in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the artificial intelligence and analytics in defence 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, processors, communication modules, and storage devices have increased production costs for AI-driven defense analytics systems, particularly affecting hardware-dependent segments such as sensors and communication devices. Regions reliant on imported electronics, including Asia-Pacific and Europe, face extended procurement cycles and higher project costs. However, tariffs have encouraged domestic manufacturing initiatives and stimulated investment in localized defense technology ecosystems, creating opportunities for regional suppliers to expand capabilities.

The artificial intelligence and analytics in defense market research report is one of a series of new reports that provides artificial intelligence and analytics in defense market statistics, including artificial intelligence and analytics in defense industry global market size, regional shares, competitors with a artificial intelligence and analytics in defense market share, detailed artificial intelligence and analytics in defense market segments, market trends and opportunities, and any further data you may need to thrive in the artificial intelligence and analytics in defense industry. This artificial intelligence and analytics in 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 and analytics in defense refer to the application of AI technologies and advanced data analytics to improve defense operations, decision-making, and situational awareness. It involves utilizing machine learning, predictive analytics, and automation in areas such as surveillance, threat detection, autonomous systems, and mission planning.

The key offerings of artificial intelligence and analytics in defense include hardware, software, and services. Hardware comprises the physical components, such as sensors, processors, communication devices, and autonomous systems, that support the deployment and operation of AI-driven defense technologies. The technologies include machine learning, natural language processing, robotics, and data analytics, deployed across cloud-based, on-premises, and hybrid systems. Key applications include surveillance, cybersecurity, combat operations, training and simulation, and logistics and supply chain management, serving end users such as defense forces, government agencies, and private contractors.

The countries covered in the artificial intelligence and analytics in defence market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The artificial intelligence and analytics in the defense market include revenues earned by entities by providing services such as consulting services, system integration services, training and simulation support services, data analytics as a service, threat intelligence services, and logistics optimization services. The market value includes the value of related goods sold by the service provider or included within the service offering. The artificial intelligence and analytics in defense also include sales of edge computing devices, high-performance servers, data storage systems, sensor arrays, and radar 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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