Market Trends of Global Artificial Intelligence And Analytics In Defense Industry
Software Segment Expected to Exhibit Highest Growth During the Forecast Period
- The AI and analytics market's software segment is poised for significant growth in the coming years. AI software, integrated into computer systems, undertakes intricate operations. It gathers data from hardware, processes it within AI systems, and formulates intelligent responses. This software encompasses machine learning, virtual assistants, and speech recognition. The market's upswing is primarily fueled by escalating defense outlays and the evolution of sophisticated AI software and associated development kits. Notably, in 2024, global defense spending hit USD 2,440 billion, reflecting a robust 6.8% uptick from 2022.
- With mounting defense budgets globally, armed forces are increasingly directing funds toward cutting-edge AI and analytics solutions to combat contemporary battlefield challenges. For instance, in March 2024, the Indian Army unveiled its Signals Technology Evaluation and Adaptation Group (STEAG), a specialized unit dedicated to exploring futuristic technologies, including AI and machine learning, for military applications.
- Besides national initiatives, numerous OEMs are bolstering their investments in AI and analytics to cater to the expanding market. Take, for instance, Safran's move in June 2024, where it announced exclusive talks to acquire Preligens, a prominent player in AI for aerospace and defense, for a substantial USD 238 million. Preligens specializes in crafting advanced algorithms to automatically detect and identify military objects, often leveraging commercial and government satellite imagery. These collective efforts underscore the growing appetite for cutting-edge AI solutions in defense.
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North America is Projected to Dominate the Market
- The market studied is witnessing robust growth in North America, primarily propelled by the substantial defense expenditure of the United States. The United States is intensifying its focus on R&D for cutting-edge defense technologies and is increasingly procuring AI and analytics-enabled devices for defense operations. Notably, in March 2024, the country sought a significant USD 32 billion for AI research, underlining its commitment to retaining global AI leadership, especially against China's advancements.
- With significant investments, the country is acquiring advanced AI and analytics solutions for defense applications. For example, in July 2024, Lockheed Martin secured a USD 4.6 million contract from the Defense Advanced Research Projects Agency (DARPA) to craft AI tools tailored for dynamic airborne missions. This endeavor aligns with DARPA's Artificial Intelligence Reinforcements (AIR) program, which focuses on refining modeling and simulation (M&S) techniques and deploying AI agents for live, multi-ship, beyond visual range (BVR) missions. Similarly, in May 2024, Palantir clinched a USD 480 million deal with the Army for its Maven Smart System prototype. Palantir's MAVEN software amalgamates data from diverse Intelligence Surveillance & Reconnaissance (ISR) systems, enabling it to pinpoint and identify enemy systems within the Area of Responsibility (AOR).
- The Army's main aim is to develop AI and machine learning solutions that bolster decision-making and support autonomous operations, ultimately enhancing the speed and scale of military actions. This surge in US government spending to bolster AI and analytics capabilities in defense is set to propel the market's growth during the forecast period.
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