The global AI in aerospace and defense market size was valued at USD 22.45 billion in 2023 and is projected to reach USD 43.02 billion by 2030, growing at a CAGR of 9.8% from 2024 to 2030. The market growth is being driven by the increasing adoption of AI-driven systems that are capable of analyzing vast amounts of data from multiple sources to optimize maintenance schedules, manage complex supply chains, and enhance logistics efficiency in aerospace and defense operations.

One of the key applications of AI in this sector is predictive maintenance. By leveraging AI algorithms, organizations can anticipate equipment failures before they occur, significantly reducing unexpected downtime and operational disruptions. Predictive maintenance ensures that components are serviced at the optimal time, extending the lifespan of critical assets and improving operational reliability. Beyond maintenance, AI enhances decision-making by providing actionable insights derived from advanced data analytics. These insights allow aerospace and defense organizations to streamline operations, lower operational costs, and allocate resources more effectively.

AI is also transforming surveillance and threat detection capabilities in the aerospace and defense industry. Advanced AI systems can process and analyze enormous volumes of data collected from sensors, satellites, radar, and other sources in real time. Using machine learning algorithms, these systems detect and identify potential threats with high accuracy, minimizing false alarms and improving situational awareness. By integrating data from diverse platforms, AI enables the generation of comprehensive intelligence that supports timely and informed decision-making. Enhanced threat detection capabilities allow for faster and more precise responses to security challenges, ultimately strengthening national defense readiness, protecting strategic assets, and safeguarding personnel.

Key Market Trends & Insights:

• In 2023, the North America AI in aerospace and defense market accounted for the highest revenue share globally, representing 40% of the market. The region’s dominance is supported by its well-established defense infrastructure, strong technological capabilities, and early adoption of AI-powered solutions across aerospace and defense operations. Within North America, the U.S. market is projected to grow at a notable compound annual growth rate (CAGR) from 2024 to 2030, driven by continuous investments in advanced AI technologies, increased focus on national security, and a growing reliance on AI to enhance operational efficiency and decision-making processes.

• By end-use, the government and law enforcement segment held the largest market revenue share in 2023, accounting for 51.0%. This segment’s prominence reflects the extensive deployment of AI-driven systems for defense, surveillance, intelligence gathering, and public safety operations. Government agencies and law enforcement organizations are increasingly leveraging AI to improve threat detection, enhance situational awareness, and optimize resource allocation, thereby strengthening security and operational effectiveness.

• In terms of offering, the software segment is expected to register the fastest CAGR from 2024 to 2030. The rapid growth of AI software solutions is driven by the increasing need for advanced analytics, predictive maintenance tools, and intelligent decision-support systems. These software applications enable aerospace and defense organizations to process large datasets in real time, improve operational planning, and integrate AI capabilities into mission-critical workflows.

• Based on deployment type, the on-premises segment accounted for the largest market revenue share in 2023. Many organizations prefer on-premises deployment to ensure data security, low-latency processing, and greater control over AI systems, especially for sensitive defense applications. By keeping AI infrastructure on-site, aerospace and defense organizations can achieve faster processing speeds, protect critical information, and maintain compliance with stringent regulatory and security requirements.

Order a free sample PDF of the AI In Aerospace And Defense Market Intelligence Study, published by Grand View Research.

Market Size & Forecast:

• 2023 Market Size: USD 22.45 Billion

• 2030 Projected Market Size: USD 43.02 Billion

• CAGR (2024-2030): 9.8%

• North America: Largest market in 2023

Key Companies & Market Share Insights:

Some of the key players operating in the AI in aerospace and defense market include Deutsche Telekom AG, General Electric Co., and Honeywell International Inc. These established companies are leveraging their expertise, technological infrastructure, and strategic initiatives to strengthen their positions in this rapidly growing market.

Deutsche Telekom AG is focusing on utilizing its robust telecommunications infrastructure to drive AI innovation within the aerospace and defense sectors. The company invests heavily in the development of advanced network solutions, the enhancement of cybersecurity measures, and the integration of AI-driven Internet of Things (IoT) applications. Strategic partnerships and collaborations with aerospace and defense contractors further support its growth and market penetration. Additionally, continuous advancements in 5G technology enable Deutsche Telekom to provide more reliable, faster, and efficient AI solutions, which are critical for complex defense operations, real-time data processing, and mission-critical aerospace systems.

General Electric Co. emphasizes digital transformation and predictive maintenance across its aviation and defense operations. The company invests in AI technologies to enhance operational efficiency, reduce equipment downtime, and support real-time data analytics and automation. By leveraging its extensive industrial expertise, research capabilities, and experience in aerospace technology, GE develops advanced AI solutions that improve performance and safety in both aviation and defense systems. These initiatives reinforce GE’s position as a leading provider of smart infrastructure and AI-enabled aerospace solutions.

Several emerging participants are also shaping the AI in aerospace and defense market, including Indra Sistemas SA, Iris Automation Inc., and SparkCognition Inc.

Indra Sistemas SA focuses on driving growth through innovation in IT and defense solutions. The company invests in AI-powered systems for surveillance, navigation, and command-and-control applications, enabling enhanced operational efficiency and situational awareness. Strategic collaborations with global defense and aerospace firms expand Indra’s market presence, while its emphasis on digital transformation and smart technology integration positions the company as a key player delivering advanced AI solutions tailored to aerospace and defense requirements.

Iris Automation Inc. is specializing in AI-driven collision avoidance systems for unmanned aerial vehicles (UAVs). The company advances its AI technologies to improve autonomous flight safety, navigation, and operational reliability. By forming strategic partnerships with aerospace and defense organizations, Iris Automation is able to expand its market reach and integrate its solutions across various UAV applications. Ongoing innovation in computer vision, machine learning, and autonomous flight technologies supports the company’s growth and increasing adoption in the aerospace and defense sectors.

Key Players

• Deutsche Telekom AG

• General Electric Co.

• Honeywell International Inc.

• Indra Sistemas SA

• Infosys Ltd.

• Intel Corporation

• International Business Machines Corporation

• Iris Automation Inc.

• Lockheed Martin Corporation

• Microsoft Corporation

• Northrop Grumman Corporation

• NVIDIA Corporation

• Raytheon Technologies Corporation

• SparkCognition Inc.

• Thales Group

Explore Horizon Databook – The world's most expansive market intelligence platform developed by Grand View Research.

Conclusion:

The global AI in aerospace and defense market is set for strong growth as artificial intelligence becomes increasingly embedded in both defense and aviation systems. Expansion is being driven by the use of AI to enhance predictive maintenance, optimize supply chains, improve decision making, and advance surveillance and threat detection capabilities. Continued technological innovation, increasing investments in AI, and strategic collaborations are enabling organizations to modernize operations, increase efficiency, and respond more effectively to evolving security and operational challenges.