Industries > Research / Defense

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The technologies of the defense industry are in the early stages of a seismic shift: artificial intelligence (AI) and robotics are changing defense now and will enable intelligent warfare in the decades to come. These technologies will have a correspondingly tectonic effect on defense contractors. In the near term, incorporating AI into the design of traditional battle networks will vastly improve performance of current platforms and forces. Prime contractors will maintain an advantage during this phase. However, as the capabilities of AI and robotics reach an inflection point, the US Department of Defense (DoD) will shift to smaller AI- and robotics-based systems—and will rely on nontraditional players to provide them.

Thus far, many established defense contractors have treated AI and robotics as ancillary markets. But they have underestimated the long-term threat to their business. AI and robotics specialists are bringing step change improvements to legacy systems and are building scale, know-how, and trust within the DoD. For now, they are primarily working through traditional contractors. But as trust in independent autonomous systems grows, the contractors that provide them will also gain trust—and share.

Although the full impact of the AI- and robotics-driven revolution is a decade or more away, it is clear that these technologies will radically disrupt the defense industry. How should defense contractors respond? We believe that they should take the lead in AI and robotics, making the strategic changes and investments necessary to win in these emerging segments.