Artificial Intelligence in Military Market Size, Share, and Industry Analysis By Offering (Hardware, Software, and Services), By Application (Warfare Platform, Cyber Security, Logistics & Transportation, Surveillance & Situational Awareness, Command & Control, Battlefield Healthcare, Threat Detection, By Technology (Machine Learning, Context-Aware Computing, Computer Vision, Intelligent Virtual Agent (IVA) /Virtual Agents & Others), By Platform (Land, Naval, Airborne, & Space), and Regional Forecast, 2026-2034

The global artificial intelligence in military market size was valued at USD 10.7 billion in 2025. The market is projected to grow from USD 12.11 billion in 2026 to USD 32.63 billion by 2034, exhibiting a CAGR of 13.19% during the forecast period.

The global artificial intelligence in military market is growing fast and is expected to reach tens of billions of dollars as countries everywhere try to have the best defense technologies. Advances in artificial intelligence are making the military’s defense systems smarter and faster by including new software and tools in intelligence, automatic vehicles, and cyber protection.

Another major opportunity for growth is AI’s capability to handle huge piles of information, supply instant insights, and improve online security. Current warfare gathers massive data from different sources such as sensors, intelligence, and communication.

Artificial Intelligence in Military Market Driver

More Funds Given to the Defense Ministry to Expand the Market

It is mainly because nations around the world have increased how much they spend on defense. As there are more tensions and threats from various groups and states, countries are spending a big part of their budgets on upgrading their military.

Progress in the Field of AI Technologies to Advance the Market

At the same time, quick and consistent growth in AI technologies is supporting the market’s development. New inventions in machine learning, deep learning, computer vision, natural language processing, and robotics are making AI systems better for the military.

Artificial Intelligence in Military Market Restraint

Legal Matters to Pose Potential Impediments on this Market

Even though AI can boost military capabilities, certain obstacles in the market block its development, mainly because of ethical and legal matters. When it comes to real-world problems, Lethal Autonomous Weapon Systems, known as "killer robots", are a big concern since they can decide on attacks and act of their own accord.

Artificial Intelligence in Military Market Opportunity

Strong Connection with Unmanned Systems to Create Opportunity in this Market

A main reason driving AI in the military is its strong connection with unmanned systems. The use of drones in the air, land, and sea opens a huge space for AI to be put into practice by the military.

Segmentation

Key Insights

The report covers the following key insights:

• Market drivers, restraints and opportunities
• Influence of key industrial players and key developments
• Accelerated Integration of Autonomous and Semi-Autonomous Systems
• Enhanced Data Analysis

Analysis by Offering

By Offering, the Artificial Intelligence in Military market is divided into Hardware, Software & Services

Stronger and more efficient computers are required in the hardware segment because they are needed to manage the huge sets of data gathered during surveillance, reconnaissance, and combat operations today.

Software in the AI field deals with algorithms and applications that give military technology its intelligence. Because of this, AI is quickly becoming an important part of militaries, as it helps analyze a lot of information, automates many time-consuming tasks, and improves decision-making by people.

Analysis by Application

Based on Application, the market is divided into Warfare Platform, Cyber Security, Logistics & Transportation, Surveillance & Situational Awareness, Command & Control, Battlefield Healthcare, Simulation & Training, Information Processing, Threat Detection & Others

Due to the need to improve how operations are carried out, minimise damage to people in dangerous places, and outperform rivals in warfare, there is a rise in AI investments in such systems, helping the market grow.

Since cyber warfare is constantly getting more advanced and it is essential to guard sensitive military information, many companies are turning to AI to boost their defences, growing the importance of this area.

Analysis by Technology

Based on Technology, the market is divided into Machine Learning, Deep Learning, Natural Language Processing, Context-Aware Computing, Computer Vision, Intelligent Virtual Agent (IVA) /Virtual Agents & Others

Because it is adaptable to changes in security and gets better with extra data, ML has become very popular in the market.

Because of its capability to find intricate trends in lots of data with very little human help, deep learning is boosting the horizons of military AI, encouraging more spending and in-depth research on many of its uses.

Analysis by Platform

Based on Platform, the market is divided into Land, Naval, Airborne & Space

Striving for more modern land forces and aiming to minimise human involvement and improve operations on the ground are the key reasons for AI’s rise in military land forces.

Other factors boosting the market are using AI for ship systems, cybersecurity for naval computer networks, and AI in controls that give commanders access to all relevant information.

Regional Analysis

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Based on region, the Artificial Intelligence in Military market has been studied across North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

The United States is dominating in the use of AI in the military. Because the government spends a lot on defence, invests widely in the latest advances, and has solid companies in the defence and technology fields, this has contributed to its influence. Among national defence agencies, the U.S. Department of Defence has embraced AI the most and is implementing it mainly in automated systems, information protection, and intelligence activities. Moving ahead with the National AI Initiative Act and the formation of the Chief Digital and Artificial Intelligence Office demonstrates the country’s resolve to stay ahead in using AI for warfare.

• According to U.S. Department of Defence, there are 82 counts of AI-enabled defense projects funded by U.S. DoD.
• According to U.S. Air Force, there are 340 counts of AI-equipped surveillance drones in U.S. military.

There is a strong focus on ethics as well as technological progress when it comes to Europe’s participation in the AI in the military market. While more money is being spent on defense AI by European countries facing new security dangers and wanting stronger independence, they make sure to promote the responsible and human-centric type of AI. The EU Strategic Compass for security and defense makes clear the role of defense innovation and the use of AI within upcoming military capabilities with the help of the European Defense Fund.

Emerging from the Asia Pacific region is a major role in AI in the military, mostly because of higher defense spending, ambitious changes in military forces, and increasing geopolitical conflict. China, India, and Japan are investing a lot in AI and its use in the military. In China, a complete national strategy for AI development includes close ties between the military and civilian sectors, and it pays special attention to unmanned combat, improved battlefield awareness, and operations in several battling areas.

Key Players Covered

The report includes the profiles of the following key players:

• BAE Systems Plc. (U.K.)
• Charles River Analytics, Inc. (U.S.)
• International Business Machines Corporation (U.S.)
• L3Harris Technologies Inc. (U.S.)
• Lockheed Martin Corporation (U.S.)
• Northrop Grumman Corporation (U.S.)
• Rafael Advanced Defense Systems (Israel)
• Raytheon Technologies Corporation (U.S.)
• SparkCognition (U.S.)
• Thales Group (France)

Key Industry Developments

• In March 2025, the NATO Communications and Information Agency (NCIA) confirmed the purchase of the Palantir Maven Smart System NATO (MSS NATO), which greatly improved the organization's military capabilities in April.
• In May 2025, German company Helsing showed its advanced AI-driven underwater drone surveillance system using the SG-1 Fathom gliders and the Lure software.
• In March 2025, Scale AI received a huge multimillion-dollar prototype contract from the U.S. Department of Defense in March 2025 for Thunderforge, their flagship program to integrate AI into army planning for operations and theatres.