PUBLISHER: The Business Research Company | PRODUCT CODE: 1888082
PUBLISHER: The Business Research Company | PRODUCT CODE: 1888082
Artificial intelligence in defense and security refers to the use of intelligent systems and algorithms to enhance military and homeland security capabilities. It facilitates autonomous operations, real-time threat analysis, and improved situational awareness, enabling faster and more accurate decision-making.
The key components of artificial intelligence in defense and security are hardware, software, and services. Hardware includes the physical devices and equipment that support AI systems, such as sensors, processors, servers, and communication tools. Software technologies include machine learning, computer vision, natural language processing, and others, which are applied in training and simulation solutions such as virtual reality (VR) and augmented reality (AR) training modules, adaptive learning technologies, simulation-based training environments, AI-driven decision-making simulations, and multinational training exercises. Applications of AI in this sector cover surveillance and monitoring, threat detection and prevention, cybersecurity, autonomous systems, intelligence and analysis, and more.
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.
The sharp hike in U.S. tariffs and the associated trade disputes in spring 2025 are notably impacting the aerospace and defense sector by raising costs for titanium, carbon fiber composites, and avionics materials largely sourced from global suppliers. Defense contractors, locked into fixed-price government contracts, absorb these added costs, while commercial aerospace firms face airline pushback on higher aircraft prices. Delays in component shipments due to customs bottlenecks further disrupt tight production schedules for jets and satellites. The industry is responding by stockpiling critical materials, seeking waivers for defense-related imports, and collaborating with allied nations to diversify supply chain.
The artificial intelligence in defense and security market research report is one of a series of new reports from The Business Research Company that provides artificial intelligence in defense and security market statistics, including artificial intelligence in defense and security industry global market size, regional shares, competitors with a artificial intelligence in defense and security market share, detailed artificial intelligence in defense and security market segments, market trends and opportunities, and any further data you may need to thrive in the artificial intelligence in defense and security industry. This artificial intelligence in defense and security 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.
The artificial intelligence in defense and security market size has grown rapidly in recent years. It will grow from $12.53 billion in 2024 to $14.15 billion in 2025 at a compound annual growth rate (CAGR) of 12.9%. The growth in the historic period can be attributed to rising adoption of unmanned systems, increasing reliance on AI for national defense and security operations, growing need for real-time threat detection, expansion of defense budgets, and development of autonomous weapon systems.
The artificial intelligence in defense and security market size is expected to see rapid growth in the next few years. It will grow to $22.75 billion in 2029 at a compound annual growth rate (CAGR) of 12.6%. The growth in the forecast period can be attributed to rising demand for AI-powered surveillance, expansion of military robotics, increasing need for predictive threat analysis, growing investments in cybersecurity, and higher demand for cloud-based applications. Key trends in the forecast period include advancements in AI technologies and algorithms, integration of multi-domain operations and network-centric warfare, development of autonomous and unmanned defense systems, technological integration in C4ISR and battlefield management, and improvements in sensor networks and data analytics.
Rising defense budgets are expected to drive growth in the artificial intelligence in defense and security market. Defense budgets refer to government financial allocations for military operations, equipment, personnel, and related activities. Budgets are increasing due to rising geopolitical tensions, prompting nations to strengthen military capabilities and ensure national security. Higher defense budgets support artificial intelligence in defense and security by funding AI research, development, and deployment in areas such as surveillance, autonomous systems, and threat detection. For example, in April 2024, the Stockholm International Peace Research Institute (SIPRI), a Sweden-based non-government organization, reported that global military spending in 2023 reached $2,443 billion, a 6.8% increase in real terms from 2022. Consequently, increasing defense budgets are expected to propel the artificial intelligence in defense and security market.
Key companies in the artificial intelligence in defense and security market are developing advanced solutions such as automated AI engines to enhance decision-making speed, operational efficiency, and threat detection capabilities. An automated AI engine is a self-learning system that autonomously processes large volumes of data, analyzes patterns, and makes real-time decisions or predictions without constant human oversight. For instance, in November 2025, Tidal Cyber Inc., a US-based cybersecurity company, launched NARC (natural attack reading and comprehension) to improve threat intelligence by automating the analysis of cyberattack data. It transforms unstructured cyber threat intelligence into structured, actionable knowledge by extracting adversary procedures and mapping them to the MITRE ATT&CK framework. This automation accelerates threat analysis, reduces manual effort, and creates a rich, interconnected threat intelligence base, providing security teams with faster, more accurate insights for improved detection, incident response, and proactive cyber defense.
In April 2024, Shield AI Inc., a US-based aerospace and defense technology company, acquired Sentient Vision Systems Pty Ltd. for an undisclosed amount. The acquisition aims to strengthen Shield AI Inc.'s AI-driven autonomous systems by integrating Sentient Vision Systems' advanced wide-area motion imagery technology, expanding capabilities and market presence in Australia to support allied defense operations. Sentient Vision Systems Pty Ltd. is an Australia-based software company specializing in artificial intelligence for defense and security.
Major players in the artificial intelligence in defense and security market are Microsoft Corporation, L3Harris Technologies Inc., RTX Corporation, Lockheed Martin Corporation, IBM Corporation, Cisco Systems Inc., General Dynamics Corporation, Northrop Grumman Corporation, Broadcom Inc., BAE Systems Plc, NVIDIA Corporation, Thales Group, Leonardo S.p.A., Leidos Holdings Inc., Palo Alto Networks Inc., Juniper Networks Inc., Fortinet Inc., Check Point Software Technologies Ltd., Palantir Technologies Inc., Trellix Corporation, RSA Security LLC, Shield AI Inc., and Charle's River Analytics Inc.
North America was the largest region in the artificial intelligence in defense and security market in 2024. The regions covered in artificial intelligence in defense and security report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
The countries covered in the artificial intelligence in defense and security market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
The artificial intelligence in defense and security market consists of revenues earned by entities by providing services such as predictive maintenance, logistics and supply chain optimization, training and simulation, and mission planning support. The market value includes the value of related goods sold by the service provider or included within the service offering. The artificial intelligence in the defense and security market also includes sales of AI-powered command and control systems, autonomous weapon systems, and facial and biometric recognition 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.
Artificial Intelligence In Defense And Security Global Market Report 2025 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses on artificial intelligence in defense and security market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for artificial intelligence in defense and security ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward, including technological disruption, regulatory shifts, and changing consumer preferences? The artificial intelligence in defense and security market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
The forecasts are made after considering the major factors currently impacting the market. These include the technological advancements such as AI and automation, Russia-Ukraine war, trade tariffs (government-imposed import/export duties), elevated inflation and interest rates.