BAE Systems report: 80% of defence leaders put AI at the fore, but there are still gaps in digital readiness
September 4, 2025
Four in five defence and aerospace leaders say artificial intelligence (AI) sits at the centre of their digital strategies, but a new BAE Systems study reveals that most organisations remain at an early stage in modernising how they manage complex assets.
Released ahead of the opening of DSEI next week, the report, Emerging technology behind the scenes of defence, surveyed 540 senior decision-makers across nine countries.
While 82% confirmed that leveraging AI is a priority, only 12% described their organisations as being at an “advanced” or “optimised” stage of digital asset management. Nearly half admitted their current systems lack consistency and scalability.
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Regional disparities in defence digital transformation
The data shows wide disparities in maturity. The UK, Canada and Japan reported higher levels of digital readiness, with up to 20% classifying themselves as advanced. In contrast, Australia, Saudi Arabia, Denmark, Norway and France all recorded zero respondents at an optimised stage.
Some of these findings reflect national defence challenges. The report references the Australian National Audit Office’s criticism of the Navy’s two largest landing helicopter dock vessels, which have suffered from “ongoing deficiencies” and “critical failures during operations”. Respondents in Australia pointed to security vulnerabilities as a particular concern.
Meanwhile, Saudi Arabia’s defence leaders placed “AI-driven analytics for smarter decision-making” at the top of their digital wish list. UK respondents prioritised improved data integration and stronger cybersecurity.
Keeping assets mission-ready in increasingly challenging times
Alongside the struggle to integrate systems, 41% of respondents cited cyber threats and supply chain vulnerabilities as critical factors undermining readiness.
The report notes that no organisation surveyed believed it faced no external pressures, underscoring the universality of these risks.
Nearly all (97%) decision-makers in defence and aerospace said there is pressure to keep assets mission-ready, and eight in ten (81%) stated that transforming their organisation’s approach is a key priority for 2025.
“The rapidly evolving nature of warfare is placing heightened pressure on many of our customers to meet the demands of a constantly shifting threat landscape,” says Andrea Thompson, Group Managing Director at BAE Systems’ Digital Intelligence business. “That pressure includes ensuring critical assets operate at peak performance, for as long and as often as possible.”
The findings are framed against a backdrop of rising investment in digital warfare infrastructure.
The UK’s Strategic Defence Review 2025, for instance, pledged more than £1 billion for a “Digital Targeting Web” and created a Cyber and Electromagnetic Command to oversee defence operations in cyberspace.
Maintenance optimisation: The key to military readiness
Asked what capabilities matter most in digital solutions, respondents highlighted maintenance optimisation (55%) above all else. The logic is simple: a warship or helicopter that is grounded cannot support a mission, regardless of other factors.
Other high-value functions included predictive maintenance, stronger regulatory compliance tools, and improved interoperability with allies’ systems. Nearly 100% of organisations that had begun digitisation reported seeing a return on investment.
AI-driven asset management and interoperability for the future
The majority of decision-makers (83%) agreed that non-digital approaches to asset management are now too complex to be sustainable. Yet most are still in the early stages of transformation. Two-thirds plan to invest more in 2025 than they did in 2024, suggesting momentum is building.
BAE Systems’ PropheSEA platform – already in use with the Royal Navy and NATO – is positioned as one solution to these challenges, but the report makes clear that success will require more than just technology. Integration, interoperability, and trust in data will be decisive.
The picture that emerges is one of ambition running ahead of capability. AI may be the buzzword on everyone’s lips, but defence organisations face a long road in turning digital strategies into mission-ready practice.
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