Artificial Intelligence (AI) in Aerospace and Defense

The AI in aerospace and defense market grew from $25.69 billion in 2024 to $29.27 billion in 2025, marking a CAGR of 14% and is projected to reach $48.76 billion by 2029.
Growth is fueled by increased defense budgets, geopolitical tensions, and military modernization programs, focusing on autonomous defense, predictive maintenance, and data-driven decision systems.
Key strategies include developing embedded AI solutions such as Safran Electronics and Defense’s Advanced Cognitive Engine and AI analytics platforms like those acquired to enhance surveillance and reconnaissance.
The North America region is currently the largest market in AI for aerospace and defense, with Asia-Pacific, Western and Eastern Europe also playing significant roles.
Trade tensions and rising tariffs are impacting the sector, leading companies to stockpile materials and diversify supply chains.
The market encompasses a variety of segments including hardware, software, and services with applications like predictive maintenance, surveillance, and autonomous navigation across different platforms (land, naval, airborne, space).
Major players include Microsoft, Airbus SE, Raytheon Technologies Corporation, Lockheed Martin Corporation, IBM, and Intel Corporation, amongst others.
Comprehensive market statistics are provided in the report for understanding current and future industry scenarios.