AI Robots in Military and Defense Market Size to Attain USD 10,564 Million by 2034

The global AI robots in military and defense market size accounted for USD 1,420 million in 2024 and is predicted to touch around USD 10,564 million by 2034, growing at a CAGR of 22.22% from 2025 to 2034. AI robots in military and defense market have been growing rapidly as there is an increase in demand for unmanned systems, battlefield automation, and intelligent surveillance technologies. The key drivers for the market include geopolitical tensions, soldier safety, and increased government investment to modernize defense infrastructure.

Highlights of the AI Robots in Military and Defense Market

• By application, the search and rescue operations segment dominated and is expected to sustain the position with the fastest rate of growth.
• By application, the border security segment is anticipated to show a notable rate of growth.
• By component, the software segment led the market.
• By component, the hardware segment is anticipated to expand rapidly.
• By technology, the advanced computing segment captured a significant portion of the market in 2024.
• By technology, the AI system segment is anticipated to grow with the highest CAGR in the market during the studied years.
• By installation, the new procurement segment maintained a leading position in the market in 2024.
• By installation, the AI upgrade segment is projected to expand rapidly in the market in the coming years.
• By platform, the space segment is anticipated to have the highest CAGR.
• By region, North America held the dominant share of the AI robots in military and defense market.
• By region, Asia-Pacific will gain a significant share of the market over the studied period of 2025 to 2034.

Industry Valuation and Growth Rate Projection

The AI robots in military and defense market deal with robots in defense, which are autonomous or semi-autonomous machines that are equipped with artificial intelligence and perform defense-related tasks. These tasks can include reconnaissance, explosive ordnance disposal (EOD), logistics support, and combat tasks. AI robots utilize techniques such as machine learning, computer vision, and real-time decision making to assist Department of Defense (DOD) personnel in rapidly changing and high-risk environments with minimal human input. AI robot technology is used extensively in land, air, and naval forces for technological and mechanical warfare, combat simulation, threat detection, border patrol, and reconnaissance. As an example of progress made in systems and applications, autonomous drones and unmanned ground vehicles (UGVs), such as those used by the U.S. military in harsh environments, illustrate AI robot applicability.

AI Robots in Military and Defense Market: Stats and Figures

• According to the U.S. Department of Defense, contract spending on military AI-related projects surpassed $1.5 billion in fiscal year 2023.
• The aeronautics industry in Europe is a sector of great importance that contributes 405,000 jobs, Euro 130 billion in revenue, and is the second largest in exports, at Euro 109 billion.
• In November 2024, Odyssey Systems Consulting Group, which is a top-level provider of superior management, analytical, and technical support services, won a 5-year USD 531 million contract to provide advisory and assistance services to the U.S. Air Force's Intelligence, Surveillance, Reconnaissance (ISR) and Special Operations Forces (SOF).
• According to the International Air Transport Association, the global air passenger traffic demand metric for revenue passenger kilometers is expected to grow by another 11.6% in 2024 over 2023.

What Are the Market Trends in AI Robots in the Military and Defense Market?

The market trends in the AI robots in the military and defense market are defined by soldier safety and risk reduction, and government investment in AI and defense modernization.

Soldier Safety and Risk Reduction Military organizations worldwide are incorporating AI robots to mitigate the risks to human soldiers in more dangerous settings. These robots can enter potentially hostile environments to accomplish a surveillance mission, a bomb disposal mission, or a search and rescue operation, which results in significantly fewer casualties. The use of AI-enabled drones and EOD robots allows for a manned mission to be replaced with unmanned missions in dangerous or combative environments. The Israel Defense Forces and the U.S. Army have increased the number of autonomous systems in the field to counter IEDs and conduct certain reconnaissance missions in areas of interest. This operational shift will allow for certain missions to continue without compromising soldier safety.

Government Investment in AI and Defense Modernization Countries are investing heavily to incorporate AI across military and defense platforms. For example, the U.S. established the Joint Artificial Intelligence Center (JAIC) to make strident advances in AI/DX defence to make it a reality. Likewise, similar funding to advance autonomous weapons and AI defense tools is being rolled out in China and Russia. These moves promote long-term research and development (R&D) horizons, partnerships with commercial technology partners, and procurement of advanced AI systems to be used in defence applications (ie, advanced autonomous systems). Defence appropriations for spending on R&D in all the major economies now have individual funding programs earmarked to spend specifically on smart warfare tools and other emerging markets to drive capability development. AI robots will also make decisions faster and more accurately; the pace of modern combat has accelerated, necessitating their strategic use and integration.

What Are the Restraints on the AI Robots in Military and Defense Market?

The growth of AI robots in military and defense market is restrained by factors such as ethical & regulatory challenges and cybersecurity system risks.

Ethical & Regulatory Challenges Another key barrier is ethical questions and regulatory ambiguity regarding autonomous lethal systems. Beyond issues of the reliability of AI in life-or-death situations, there has been a growing number of discussions in the UN on whether autonomous weapons are ethical. There are countries and organizations that think fully autonomous weapons should not be developed and cite a lack of accountability as one of the core issues. All this discussion has the potential to limit the timing of fielding, as companies and military buyers could be hesitant. In addition, the uncertainty around laws regarding technoities (national and international), in addition to the lack of regional agreement on military doctrine around AI in warfare, may limit collaboration between allied countries, in addition to limiting industry stair steps to technology deployment.

Cybersecurity System Risks Military robotics powered by AI is very dependent on digital structures, making them perfect targets for cyberattacks. Hacking, data breaches, or making the robot's signal unavailable creates the potential to make the robots worthless, undetectable, or even hostile in nature to military operators. In 2021, reports emerged of drone systems being spoofed in the conflict region. As military robotics relies even more on satellite communications and machine-learning algorithms, data and/or signals in their systems make their systems vulnerable; a single breach in the entire system can fail their intended mission or worse.

What Are the Opportunities for AI Robots in Military and Defense Market?

One key opportunity in the AI robots in military and defense market is the advent of AI integration into space and satellite defense systems to provide real-time monitoring, navigation, and combat support in unfamiliar environments. Another emerging opportunity is AI-assisted multi-domain operations (MDO), where robots operate together across air, land, sea, cyber, and space for joint missions. These capabilities and fusion of technologies provide opportunities for interoperability with allied forces, to assist in prediction analysis of threats, and help attain battlefield superiority. Such as more defense collaborative endeavours of NATO's AI strategy or Indo-Pacific alliances, vendors can take advantage of cross-border opportunities and joint ventures for their respective market footprint.

Industry Leader Announcements

• Randy Yamada, Vice President at Booz Allen Hamilton, said:

“As a strategic investor, Booz Allen is hyper-focused on fast-tracking results through private sector innovation and bringing capabilities that will disrupt the federal technology market. Scout AI’s technology will play a pivotal role in outpacing emerging threats with the realization of uncrewed systems, specifically in communications-constrained environments.”

• The U.S. Army Engineer Research and Development Center (ERDC) said in a LinkedIn post:

“It all comes down to scare tactics, the system, which includes a large, plastic coyote mounted to a UGV base, is aimed at helping biologists and managers at military airfields deter wildlife, particularly problematic birds, from posing a risk to flight crews, aircraft, and operations.”

Segmental Insights

Application Insights

The search and rescue operations segment dominated and is expected to sustain the position with the fastest rate of growth because there is a great demand for artificial intelligence (AI) robots to operate in risky and unpredictable environments. The A.I. robots in this segment increase response time, use thermal to find survivors, and can navigate through hazardous and unpredictable terrain and debris masses autonomously. Governments that provide disaster relief, remove personnel from combat zones, and provide humanitarian missions prioritize the use of A.I. robots to assist, and robots can make significant investments into procurement and adoption. A.I. robots are incredibly advantageous because they mitigate risk to the human operator, who can act in pursuit of the human being rescued, and robots can greatly increase the efficiency of the mission itself.

The border security segment is anticipated to show a notable rate of growth as countries are looking for enhanced control and monitoring systems to help mitigate illegal crossings, smuggling and border terrorism including the use of automated border surveillance and monitoring that some countries use for drone-bots to shuttle along borders to offer physical patrols, threat mitigation and rapid response to threats across rough and remote border areas.

Automated autonomous robots provide surveillance and interdiction technology, and represent a response to political uncertainty across the globe, geopolitical tensions, and, quite frankly, the need for unmanned solutions in sensitive regions are compounding for defense and border authorities to begin the proliferation of AI automation robots in border management.

Component Insights

The software segment led the AI robots in the military and defense market due to the criticality of AI algorithms, data processing, and decision-making capabilities for autonomous functions. Machine learning, computer vision, and predictive analytics are fundamentally important to tasks such as mission planning, real-time navigation, and target identification. High levels of demand for AI software suites are driven by the need to continuously improve and customize in accordance with mission requirements. Moreover, the software component is scalable and modular to allow it to be installed and integrated into platforms ranging from UAVs to manned aircraft, making it the foundation for intelligent defense systems and the foremost area of investment.

The hardware segment is anticipated to expand rapidly, particularly with the increased production and use of drones, unmanned ground vehicles (UGVs), and robotic systems in the defense sector. There are a number of individual hardware components that together enable real-time operation and autonomous movement, in particular sensors, actuators, processors, and communication devices.

Technology Insights

The advanced computing segment captured a significant portion of the AI robots in the military and defense market in 2024 because they are needed to facilitate real-time decision-making, diverse and complex data processing, and autonomous control of AI in battlefield situations. High-performance computing (HPC), edge computing, and neuromorphic chips are being increasingly integrated into AI robots to increase operational speed and efficiency. Advanced computing allows multiple data interpretations of data from multiple sensors and sources, and improves the overall accuracy of missions.

The AI system segment is anticipated to grow with the highest CAGR in the market during the studied years, as defense agencies utilize combined AI frameworks to easily allow robots to operate. The systems that armed forces are developing to unify their robotic functions are generally not functionally bound to a particular AI capability (e.g., language processing, vision, machine learning) but instead provide an end-to-end autonomous function that encompasses all three.

Installation Insights

The new procurement segment maintained a leading position in the market in 2024 as defense agencies launched a priority to acquire next-generation AI-enabled robots with sophisticated capabilities that can be adapted to modern warfare, including autonomous navigation, precision targeting, and sharing data in near real time. Governments are now identifying large-scale tenders and budgets that are strictly for new AI robotic systems, and not for retrofitting. To illustrate this, recent contracts issued by NATO members are for solely new autonomous platforms-in short, if it has been in service before, the focus is on new standalone large-scale procurements by militaries worldwide.

The AI upgrade segment is projected to expand rapidly in the market in the coming years, as many militaries are looking to modernize existing robotic platforms using advanced AI. Rather than replacing systems outright, retrofitting current systems affordably allows the defence forces to start using advanced software, sensors, and better decision-making algorithms on their existing systems. With additional innovation and development of AI systems and platforms, and the regular updates of software and swap modules, we see steady growth in the upgrades segment.

Platform Insights

The space segment has is anticipated to have the highest CAGR as militaries continue to militarize space and countries develop a greater need for AI-based satellite servicing, debris removal, and robots that perform space surveillance; these robots help primarily with monitoring the adversary's satellite activity and defending national assets in orbit which is a necessity for any country to maintain national security.

Geographical Insights

North America

North America held the dominant share of the AI robots in military and defense market because of significant defense budgets, existing technological infrastructure, and research and development in autonomous systems. The U.S. Department of Defense (DoD) has been a leader in AI integration across all military branches, investing in projects related to surveillance, logistics, and combat systems. AI robots are that region's fastest-growing market because of the collaboration between defense contractors and technology startups, which promotes innovation, and due to increasing geopolitical tensions that require battlefield superiority and maintaining and enhancing global influence. Further, public-private partnerships in that region provide a steep boost to the market's growth, as seen in examples like Booz Allen's investment in Scout AI and Anduril's utilization of autonomous operatives in surveillance systems.

Asia-Pacific

Asia-Pacific will gain a significant share of the market over the studied period of 2025 to 2034 due to the most rapid military modernization efforts, border entanglements, and sovereign AI development initiatives that have painted the region’s readiness. Investment in AI-enabled defense technologies is crazy in China, India, and South Korea, for instance, and includes advancements in defense capabilities with a view to reducing human involvement in particularly hazardous areas and situations. AI-enabled funding is advancing quickly for commercial activities, as well as large rounds of funding to robotics startups. Government funding activity for developing the next version of unmanned aerial systems and unmanned ground vehicles is also happening in addition to the timelines of defence sector strategic initiatives to AI-enabled approaches, and activity along with emerging private sector funding opportunities for AI capabilities.

Recent Developments in AI Robots in Military and Defense Market:

• In April 2025, Booz Allen Hamilton's investment in Scout AI demonstrates an interest in furthering "physical AI," related mostly to defense. The intent of the investment, which supports the goal of scaling autonomous robotics solutions for complex missions, is an indication of the potential interest of conventional defense contractors in the wider topic of next-generation battlefield autonomy.
• In July 2025, the U.S. Army’s new defense package included new 'defensive systems', specifically robotic 'coyotes' to protect airfields and fighter jets. These semi-autonomous robotic defenses were designed for confusion and deterrence by misleading or spoofing enemy drones. The demonstration included unique AI-powered deception maneuvers intended to confuse and mislead the enemy to help support airbase protection as aerial threats increase.

Competitive Landscape

The AI robots in military and defense market are experiencing increasing competition with advancements in AI tech worldwide and the rise in geopolitical tensions. Some of the major companies in the market include Machine Halo, Lockheed Martin, Northrop Grumman, Raytheon Company, Thales Group, Bae Systems, IBM, General Dynamics, Soartech, and Nvidia.

• Company Name: Machine Halo
• Year of Incorporation: 2015
• Headquarters: Vancouver, British Columbia, Canada

Machine Halo creates robots that are driven by AI for the defense industry. The classes of their robots are devoted to modular autonomous aviation/surveillance systems, battlefield automation, and physical AI systems. Their robot technology is designed to be scalable by mission/scope and is focused on intelligent mission-specific solutions as well as adaptable combat robots.

• Company Name: Lockheed Martin
• Year of Incorporation: 1995
• Headquarters: North Bethesda, Maryland

Lockheed Martin has global operations in aerospace and defense. The company offers a variety of AI products and collaborative drones, integrated autonomous systems, and smart missiles/logistics. Lockheed is a leader in advanced warfare tech development and is an industry leader in investment in AI-based mission planning.

Company Name: Northrop Grumman

Year of Incorporation: 1939

Headquarters: Falls Church, Virginia, USA

Northrop Grumman plans, develops, and manufactures autonomous systems, or robots, that are AI-driven, unmanned systems, surveillance, and security technology. The company operates in over 25 countries and works on unmanned autonomous ISR platforms and multi-domain AI collaborative robotic technology for defense missions.