Market Trends of Global Artificial Intelligence and Analytics in Defense Industry
This section covers the major market trends shaping the Artificial Intelligence & Analytics in Defense Market according to our research experts:
Software Segment Will Showcase Remarkable Growth During the Forecast Period
The software segment in the AI and analytics market is anticipated to show significant growth during the forecast period. The growth is attributed to the increasing defense spending and the development of advanced AI software and related software development kits. AI software installed in computer systems performs various complex operations. It collects data from hardware systems and processes in AI systems to generate an intelligent response. The AI software includes machine learning, virtual assistant, and speech and voice recognition.
For instance, in July 2022, Palantir Technologies Inc. announced that the company would work with the United States Army Research Laboratory to implement data and artificial intelligence (AI)/machine learning (ML) capabilities for end users across combatant commands (COCOMs). The contract was valued at USD 99.9 million for two years. Thus, rising investment from the global defense forces for developing advanced AI software drives the market's growth.
North America Is Projected to Dominate the Market During the Forecast Period
North America held the largest market share in 2022 and continued its domination during the forecast period. The growth is due to the highest defense expenditure from the United States. Increasing spending on research and development of advanced defense equipment and growing procurement of AI-enabled devices for defense operations from the United States Department of Defense drive the market's growth across the region.
In the fiscal year 2022, the United States Department of Defense (DoD) plans to invest USD 874 million in artificial intelligence (AI) related technologies to boost deterrence against potential adversaries like China. DoD also focuses on enhancing efficiencies in command and control, computing, and logistics. In the United States 2022 research and development budget, the Army requested USD 15 million for AI, and machine learning applied research, USD 10.2 million for AI and machine learning basic research, and USD 909,000 for AI and machine learning advanced technologies.
For instance, in April 2022, the United States Army signed a contract worth USD 19 million with 23 small businesses to develop machine learning and artificial intelligence solutions that will lead to more informed decision-making in the army, support autonomous operations, and increase the speed and scale of military action. Thus, growing spending from the United States government for enhancing AI capabilities in defense drives the market's growth.
