The defence economics of artificial intelligence & machine learning: classification and applications
T.R. Williams, G. R. Evans · Defense and Security Analysis · 2026
This paper analyses the defence economics of investing in Artificial Intelligence (AI) and Machine Learning (ML) by examining their place within technology and economic theories. The approach seeks to help generate a deeper understanding of the defence economics calculus surrounding the military application of prominent AI technologies, including natural language processing (NLP), computer vision (CV), and robotics. The paper discusses these areas of AI development in the context of a limited set of human abilities and how AI impacts the economics of warfighting capabilities and national defence. We emphasise integration constraints – data, architectures, compute, and algorithms – and the role of civilian R&D in military adoption. Conclusions highlight that AI cannot replace human judgement or accountability, but through the augmentation of human capabilities, AI changes established principles of defence economics, cost structures, and capability cycles.