Artificial Intelligence in Defense Market Report

[Research Report] The artificial intelligence in defense market is expected to grow from US$ 6,404.73 million in 2021 to US$ 13,153.31 million by 2028; it is estimated to grow at a CAGR of 10.8% during 2021–2028.

Unmanned aerial vehicles (UAVs) are used in multiple applications, and they are growing in popularity. Recent progress in UAVs and artificial intelligence (AI) constitutes a new chance for autonomous operations and flight. Nowadays, artificial intelligence and deep learning are driving the evolution of UAVs and fueling their autonomous future. Computer vision has progressed in image classification and segmentation and object detection, making it an attractive research field when applied on UAVs. Artificial intelligence is more beneficial for UAVs in decision-making and is essential in military operations.

For instance, Shield AI provides Nova 2, a drone system capable of outdoor and indoor autonomous, self-directed flight. Nova operates independently in complex and contested environments, leveraging AI to determine in completing the task. Shield designed the Nova2 to operate autonomously, without the need for a human to control it remotely or for a constant connection to some distant data center. It also does not need a GPS signal to navigate and map its environment. The Shield AI's Nova2 drones have already been used by the US Special Operations Command since 2018, including in combat. Therefore, AI has added more benefits to the defense sector by implementation in unmanned aerial vehicles. Thus, boosting the demand for artificial intelligence in defense market

Strategic Insights

Impact of COVID-19 Pandemic on Artificial Intelligence in Defense Market

The COVID-19 pandemic has shaken several industries. The tremendous growth in the spread of the virus has urged governments worldwide to impose strict restrictions on vehicles and human movement. Due to travel bans, mass lockdowns, and business shutdowns, the pandemic has affected economies and countless industries in various countries. The lockdown imposition has resulted in the lesser production of commodities, goods, and services.

Even though the COVID-19 pandemic caused a large-scale impact on economies across the globe in 2020, leading to many challenges, the artificial intelligence in defense market has continued to expand. This can be seen from both the demand as well the supply sides, as leading manufacturers such as IBM Corporation, Lockheed Martin Corporation, Raytheon Technologies Corporation, BAE Systems plc., and Northrop Grumman continue to invest heavily in developing artificial intelligence capabilities, and governments continue to invest significantly in securing these advanced systems. Governments have realized the potential of improved capabilities that these artificial intelligence systems could offer in terms of defense arsenal. However, despite the development of artificial intelligence technology, the supply chain disruptions of the artificial intelligence systems during the COVID-19 pandemic had a minor hit in the artificial intelligence in defense market growth. This resulted from the shortage of raw materials due to disruptions in the supply chain. The hardware systems such as artificial intelligence systems have had a slightly negative impact. However, the demand for artificial intelligence services provided to various defense organizations across the globe was high. Moreover, the government spending in the defense sector was significantly higher. Therefore, the overall impact of the pandemic on the artificial intelligence in defense market was positive.

In 2021, with the relaxation of lockdown measures and the beginning of vaccination drives, the supply-chain industry resumed working smoothly with timely delivery of raw materials of the artificial intelligence systems. Moreover, governments across the globe continue to invest significantly in securing advanced systems for the defense sector. Therefore, the artificial intelligence in defense market will grow significantly.

Lucrative Regions for Artificial Intelligence in Defense Providers

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Artificial Intelligence in Defense Market Insights

Incorporation of Quantum Computing in Artificial Intelligence Boost the Demand for Artificial Intelligence in Defense Market

The introduction of quantum computing will supercharge the artificial intelligence systems—which currently depend on binary-based classical computing—and enhance their capabilities. For instance, artificial intelligence 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. Because of the ability to process larger datasets, the information can be processed much quicker locally than 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 cyber security, as this will power up the systems for faster detection of threats and take necessary countermeasures.

The defense industry across the globe is constantly under threat of cyber-attacks. For instance, in September 2019, Solar Winds, a US technology company, was hacked, revealing sensitive data of US government agencies. Another notable incident was in October 2020, when the FBI and the US Cyber Command announced that a North Korean group had hacked think tanks, individual experts, and government entities of the US, Japan, and South Korea to illegally obtain intelligence, including that on nuclear policies. Current cyber security technology falls short in terms of tackling advanced ransom ware and spyware threats. The above-mentioned Solar Winds hack was revealed when Fire Eye, a cyber-security provider, was probing one of its own hacks. Such incidents indicate the increasing importance of having advanced cyber security capabilities. Artificial intelligence-based cyber security solutions that can be trained to independently gather data from various sources, analyze the data, correlate it to the signals indicating cyber-attacks, and take relevant actions, can be deployed. This represents significant opportunities for the artificial intelligence in defense market.

Component-Based Artificial Intelligence in Defense

Market Insights

Based on component, the artificial intelligence in defense market is segmented into hardware, software, and services. In 2020, the software segment led the market, accounting for the largest market share.

Artificial Intelligence in Defense Market, by Component, 2020 and 2028 (%)

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Technology-Based Artificial Intelligence in Defense

Market Insights

Based on technology, the artificial intelligence in defense market is segmented into advanced computing, AI systems, and learning and intelligence. In 2020, the advanced computing segment accounted for the largest artificial intelligence in defense market share.

Platform-Based Artificial Intelligence in Defense

Market Insights

Based on platform, the artificial intelligence in defense market is segmented into land, air, and naval. In 2020, the land segment accounted for the largest artificial intelligence in defense market share.

Application-Based Artificial Intelligence in Defense

Market Insights

Based on application, the artificial intelligence in defense market is segmented into cyber security, battlefield healthcare, logistics and transportation, warfare platform, and others. In 2020, the warfare platform segment accounted for the largest artificial intelligence in defense market share.

The players operating in the artificial intelligence in defense market adopt strategies such as mergers, acquisitions, and market initiatives to maintain their positions in the market. A few developments by key players are listed below:

• In March 2021, Lockheed Martin and NEC Corporation signed a joint collaboration agreement to extend their partnership. Both the companies are also finalizing a licensing agreement with a multi-year option. For several years, Lockheed Martin and NEC have been working together to evaluate the effectiveness of SIAT for early production testing and operational scenarios. As a result, Lockheed Martin has integrated SIAT into the technology for telemetry analytics for Universal Artificial Intelligence (T-TAURI) AI service. This allows the organization to drive proactive anomaly detection during the design, development, production, and test phase of spacecraft development, even before applications in mission operations.
• In March 2021, Raytheon Technologies Corporation installed emerging technology into the company’s modeling and simulation process to help defense customers visualize the performance of weapons systems before they make procurement decisions.

By Component

• Hardware
• Software

By Technology

• Advanced Computing
• AI Systems
• Learning and Intelligence

By Platform

• Land
• Air
• Naval

By Application

• Cyber Security
• Battlefield Healthcare
• Logistics and Transportation
• Warfare Platform
• Others

Company Profiles

• BAE Systems plc
• IBM Corporation
• Leidos
• Lockheed Martin Corporation
• Raytheon Technologies Corporation
• Charles River Analytics, Inc.
• General Dynamics Information Technology, Inc. (General Dynamics Corporation)
• Shield AI
• SparkCognition, Inc.
• Thales Group