Growing at 29.7% CAGR | AI in Modern Warfare Market Reach USD 109.8 Billion by 2032 Globally

WILMINGTON, DE, UNITED STATES, July 17, 2025 /EINPresswire.com/ -- According to the report published by Allied Market Research, Growing at 29.7% CAGR | AI in Modern Warfare Market Reach USD 109.8 Billion by 2032 Globally. The AI in Modern Warfare market is driven by the rising need for advanced defense technologies, enhanced battlefield decision-making, and automated systems for surveillance, targeting, and logistics. The increasing adoption of AI-powered drones, autonomous vehicles, and cybersecurity solutions further fuels market growth, alongside growing investments by governments and defense organizations globally.

The AI in Modern Warfare Market was valued at $10.4 billion in 2023 and is estimated to reach $109.8 billion by 2032, exhibiting a CAGR of 29.7% from 2024 to 2032.

Driving Factors : AI in Modern Warfare Market

The driving factors for AI in modern warfare market analysis includes rise in technological advancements, and increase in need for enhanced decision-making capabilities. AI algorithms can process vast amounts of data rapidly, providing military commanders with actionable insights for strategic and tactical decisions. This capability is crucial in modern combat environments where real-time intelligence can be the difference between success and failure. In addition, the rise of autonomous systems, such as drones and unmanned vehicles, is significantly drives the AI in Modern Warfare Market growth.

Furthermore, AI technologies are essential for both offensive and defensive cyber operations, enabling the detection and mitigation of cyber threats with unprecedented speed and accuracy. The ability of AI to predict and counter cyber-attacks before they cause significant damage is invaluable in protecting national security infrastructure.

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AI in modern warfare refers to the integration of artificial intelligence technologies into military systems and operations to enhance decision-making, efficiency, and strategic advantage. It encompasses AI-driven applications such as command and control systems for real-time decision support, intelligence and surveillance systems for enhanced situational awareness, autonomous systems for unmanned operations, and cyber warfare defenses.

AI enables military forces to automate tasks, analyze large datasets quickly, and adapt to dynamic battlefield conditions, aiming to improve operational effectiveness while reducing risks to personnel. This integration marks a transformative shift towards more advanced and interconnected defense capabilities.

Market Segmentation : AI in Modern Warfare Market

AI in modern warfare market size is segmented into by type, type of equipment, application and region. On the basis of type, the market is divided into weaponized artificial intelligence, defensive artificial intelligence, offensive artificial intelligence, assisting artificial intelligence and autonomous artificial intelligence.

On the basis of type of equipment, the market is segregated into unnamed aerial vehicle, unmanned ground vehicle, combat systems, recovery and maintenance vehicle, reconnaissance and surveillance vehicle and medical evacuation vehicle. On the basis of application, the market is divided into tactical defensive and military offensive. Region wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

Key Players : AI in Modern Warfare Market

The key players profiled in AI in Modern Warfare Market report include Textron Inc., Leonardo S.p.A, Booz Allen Hamilton Holding Corporation, General Dynamics Corporation, Microsoft Corporation, Northrop Grumman Corporation, L3Harris Technologies Inc., BAE Systems plc, Lockheed Martin Corporation, IBM Corporation, Raytheon Technologies Corporation, Boeing Co., Thales Group

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By type of equipment, the unnamed aerial vehicle segment held the highest market share in 2023, owing to its widespread adoption in various military applications, such as reconnaissance, surveillance, and combat operations. However, the unmanned ground vehicle segment is projected to remain the fastest growing segment throughout the forecast period, owing to advancements in autonomous systems, increased adoption in military operations, and the need for enhanced situational awareness and precision in ground-based missions, thereby drives the segment growth.

By application, the military offensive segment held the highest market share in 2023, due to strategic investments in autonomous weapon systems, target acquisition technologies, and AI-driven tactical decision-making tools, which drives the segment growth. However, the tactical defensive segment is projected to remain the fastest growing segment throughout the forecast period, owing to escalating cyber threats and the critical need for advanced AI-driven cybersecurity solutions.

By type, the defensive artificial intelligence segment held the highest market share in 2023, owing to increase in cyber threats and the critical need for robust cybersecurity measures. The governments and organizations prioritized investments in AI-driven defense systems to safeguard infrastructure, military assets, and sensitive data against sophisticated and evolving cyber-attacks.

However, the autonomous artificial intelligence segment is projected to remain the fastest growing segment during the forecast period, owing to advancements in machine learning, sensor technology, and the strategic advantage of unmanned systems in enhancing operational efficiency, precision, and situational awareness on the battlefield.

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Industry Trends : AI in Modern Warfare Market

Shield AI acquired Martin UAV in 2021 and introduced the V-BAT, a vertical take-off and landing (VTOL) aircraft. This VTOL capability makes V-BAT highly adaptable for various mission types and terrains. In 2022, Brazil’s defense unit placed an order for a batch of V-BATs, showing international interest in Shield AI’s innovative solutions

In April 2023, according to the Stockholm International Peace Research Institute, a Sweden-based international institute, world military spending increased by 3.7% in 2022, reaching $2,240 billion in real terms.

According to the report of Nishith Desai Associates, the U.S. is projected to spend about $17.5 billion on Unmanned Aerial Vehicles (“UAV”) and other drone-based LAWS between 2017 and 2021. Such investments highlight the pivotal role of AI in shaping the future of warfare, driving advancements in both defensive and offensive capabilities across global military landscapes, which is expected to drive the AI in Modern Warfare Market growth.

Recent Key Strategies and Developments : AI in Modern Warfare Market

In March 2023, Boeing and Shield AI signed a memorandum of understanding to explore strategic collaboration in the areas of autonomous capabilities and artificial intelligence on current and future defense programs. This agreement, signed at the Air Force Association Warfare Symposium, and will be managed by Boeing Phantom Works.

In May 2024, Roboteam, announced that is receive an initial order from the US Marine Corps for over 130 Micro Tactical Ground Robot (MTGR) systems. This purchase is part of a broader acquisition of robots, which will be valued around $30 million.

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