Artificial Intelligence (AI) in Military Market

[270 Pages Report] The Artificial Intelligence (AI) in Military Market is estimated to be US$ 9.2 billion in 2023 and is projected to reach US$ 38.8 billion by 2028, at a Compound Annual Growth Rate (CAGR) of 33.3% from 2023 to 2038. The Artificial Intelligence (AI) in Military Industry is driven by factors such as rising focus on development of high-precision military laser systems.

Artificial Intelligence (AI) in Military Market Forecast to 2028

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AI in Military Market Dynamics:

Drivers: Increase Investments in Development of AI-Enabled Solution to Strengthen Military Capabilities

The development of autonomous military systems drives the adoption of AI in the military market. The modern AI-enabled system helps to enhance the efficiency of military systems and strengthen their capabilities in Warfield. Therefore, the defense forces of leading countries have increased their defense spending to boost the deployment of AI on military platforms. According to a report by Stockholm International Peace Research Institute (SIPRI) in April 2023, the US, Russia, China, India, and Saudi Arabia collectively accounted for 63% of defense expenditure in 2022. Global military spending grew by 3.7% in 2022 and reached UD$ 2,240.0 billion. Nine major international conflicts have occurred in recent years, including the Russia-Ukraine war, the Saudi Arabia-Yemen conflict, the Syrian Civil War, US-Iran tensions, the India-China tensions, and Armenia-Azerbaijan border conflict. Such conflicts result in increased procurement of advanced AI-enabled weapon systems and the incorporation of newer technologies into existing systems to make them more efficient. In addition, in April 2021, eight European North Atlantic Treaty Organization (NATO) members met the 2021 alliance’s goal of allocating at least 2% of their GDP to armed forces. The following table indicates the defense expenditures of major countries during 2020-2022.

Restraints: Lack of Protocols and Standards for Use of AI in Military Applications

The development, management, and successful implementation of AI systems require certain protocols. Presently, since only a few countries are using AI in the military arena, there are very few standards and protocols for their use.

As most AI capabilities are being developed by private companies, there is a lack of co-operation between governments and companies in developing these technologies. This is because companies are reluctant to share their intellectual property with the government, as there are no standard regulations. They also face complexities in defense acquisition processes and the lengthy and complicated legal framework involved, and thus, many companies have refused to do business with the US Department of Defense (DoD). Such factors indicate the lack of proper standards and protocol for the use of AI in military applications, which poses a restraint to market growth.

Opportunities: Incorporation of Quantum Computing in AI

A quantum computer works on phenomena such as “superposition” and “entanglement.” Through these computational advantages, a quantum computer can outperform any modern classical computer. For instance, Google recently reported that it developed a quantum processor, “Sycamore,” that has demonstrated the ability to solve a complex mathematical problem in 200 seconds, while the same results will only be obtained in 10,000 years using the most advanced supercomputer available today.

This power of quantum computing can also be introduced in AI systems. This will supercharge the AI systems that now depend on binary-based classical computing and enhance their capabilities. For instance, AI can crunch through a larger data set and learn from it to give a better model and, thus, more accurate predictions. This can have various applications in the defense industry for security and privacy. Having the ability to process larger datasets, the information can be processed much quicker locally rather than depending on the cloud. For instance, data from all sensors attached in an autonomous Ai-powered tank can be processed quickly, and decisions can be made faster. Quantum computing will play a huge role in cybersecurity, as this will power up the systems for faster detection of threats and take necessary countermeasures. This presents significant opportunities for the AI in military market.

Challenges: Concerns Related to Data Privacy and Security

The integration of AI with warfare systems requires data that can be used for training and building reliable AI programs. This data is crucial to develop and enhance AI systems. However, governments are reluctant to share military data with private companies owing to its sensitive nature as it may jeopardize the security of critical mission-based information. Several AI-enabled autonomous systems require encrypted communication and data transfer links, and as data transmitted from these systems is vulnerable to cyber-attacks, governments are more reluctant. With the number of sophisticated cyberattacks on the rise, governments are even more skeptical about entrusting their sensitive data to AI-enabled systems.

This, in effect, creates a vicious cycle: one that prevents AI systems from developing due to the unavailability of data and digital security compromises due to subsequently untrained AI systems. Thus, concerns related to the sharing of sensitive military data are acting as a key challenge to the growth of the AI in military market.

Ai In Military Market Ecosystem

Prominent companies in this market include well-established, financially stable providers of AI solution for military purpose. Major players operating in the AI in military market include Lockheed Martin Corporation (US), Raytheon Technologies Corporation (US), Northrop Grumman Corporation (US), BAE Systems plc (US), and Thales Group (France).

Based on the Offering, the Software Segment is Projected to Grow at the Highest CAGR in the AI in Military Market During the Forecast Period

Based on offering, the AI in military market has been segmented into hardware, software, and services. The hardware segment has been classified into processor, memory, and network. The growth of the software segment can be attributed to the significance of AI software in strengthening the IT framework to prevent incidents of a security breach. As data privacy policies and regulatory compliances have become stringent, the demand for cybersecurity solutions using AI is expected to increase in the near future. IBM is the leader in providing software powering AI.

Based on Application, the Information Processing Segment to Held Second Largest Share in the Base Year

Based on application, the market for artificial intelligence in the military has been segmented into warfare platforms, cybersecurity, logistics & transportation, surveillance & situational awareness, command & control, battlefield healthcare, simulation & training, information processing, threat/target monitoring and tracking, and others.

Among these the information processing segment to held second largest share in 2023. AI is used for the processing of a huge cache of data that provides valuable information. It helps in the culling and aggregation of information, which assists military personnel in recognizing patterns and derive correlations in data sets. AI acquires and sums supersets of information from various sources. The processed information is used for further investigation with machine learning or deep learning tools.

North America Hold Largst Share in 2023

The North America hold the largest share in 2023. This large share is due to the several factors such as, High spending on advancement of defense sector, strong focus on adoption of state-of-the-art technologies, and the presence of a leading players in the region.

Artificial Intelligence (AI) in Military Market by Region

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Artificial Intelligence (AI) in Military Companies - Key Market Players

Major Artificial Intelligence (AI) in Military Companies include Lockheed Martin Corporation (US), Raytheon Technologies Corporation (US), Northrop Grumman Corporation (US), BAE Systems plc (US), and Thales Group (France).

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Scope of the Report

Artificial Intelligence (AI) in Military Market Highlights

This research report categorizes the AI in military market based on offering, application, technology, platform, installation type, and region.

Recent Developments

• In April 2023, Raytheon Technologies Corporation launched its new AI-assisted EO/IR system, RAIVEN. This solution allows military pilots to obtain faster and more accurate threat identification.
• In March 2023, Northrop Grumman Corporation, in partnership with Shield AI, has been selected by the U.S. Army for the Future Tactical Unmanned Aircraft System (FTUAS) competition, Increment 2. This competition aims to replace the RQ-7B Shadow tactical unmanned aerial system (UAS) with advanced capabilities.
• In January 2023, Lockheed Martin Corporation introduced its new AI model Aegis. This model is used to improve the operation efficiency of Agis Combat System. The AI enabled Agis combat system offers improved operator decision making, situational awareness, reduced reaction time, and the ability to defend against hypersonic threats. It also predictively determines when parts will need maintenance before they break.
• In July 2022, Raytheon Technologies has chosen the C3 AI Platform to deliver state-of-the-art artificial intelligence (AI) and machine learning (ML) capabilities, presenting a readily available solution for the U.S. Army's Tactical Intelligence Targeting Access Node (TITAN) program.
• In June 2022, Lockheed Martin Corporation introduced new AI/ML technology enable solution. First, a Cognitive Mission Manager, command and control suite of services designed to use AI/ML to deliver accurate, timely, and actionable intelligence to the ground commanders and operators. Second, Cognitive Tip & Cue product to find tanks on a battlefield. Third, AI/ML tools that offer Object Level and Pixel Level Change Detection using time series satellite imagery to deliver automated, rapid change detection. At last, TruthTrail, a prototype gamification application built off a gaming engine which presents a simulated environment that “rewards” labelers for their work.

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