As artillery thunders across Ukraine, drones stalk the skies above Gaza, and tensions simmer from East Asia to the Sahel, a different kind of battle is being fought in boardrooms and factories: the global race to supply the bullets of tomorrow. The world’s arms industry has exploded into a $600+ billion powerhouse, with ammunition alone accounting for over $80 billion-and that number is rising at 5% annually.
From AI-guided shells and hypersonic missiles to autonomous drone swarms, ammunition is no longer just a commodity of war-it’s the currency of power.
The United States remains the dominant arms producer, with defense juggernauts like Lockheed Martin, Raytheon, and General Dynamics generating $317 billion in defense revenue in 2023. U.S. foreign military sales surged to $81 billion, driven by demand from NATO allies and Indo-Pacific partners.
Chinese firms like Norinco and Poly Technologies are flooding Africa and South Asia with low-cost missiles, drones, and conventional ammo
Meanwhile, China is accelerating its rise with $103 billion in arms revenues. Chinese firms like Norinco and Poly Technologies are flooding Africa and South Asia with low-cost missiles, drones, and conventional ammo, undercutting Western manufacturers and increasing Beijing’s geopolitical leverage.
Across Europe, the Ukraine war has shattered decades of complacency. Germany’s Rheinmetall and France’s Nexter are expanding rapidly, with the EU pledging to produce 1 million 155mm artillery shells per year by 2025. The bloc’s new European Defence Industry Programme (EDIP) is pumping billions into joint arms production.
“This isn’t just about bullets-it’s about economic dominance,” says defense analyst Laura Peterson. “Whoever controls the future of ammunition controls the future of war.”
The 21st-century battlefield is no longer dominated by tanks and bombers-it’s ruled by, robotics, and precision-guided munitions. Beyond quantity lies a new battlefield: smart munitions. From GPS-guided artillery to AI-enabled drones, the ammunition of the future is autonomous, precise, and terrifyingly efficient. The next generation of ammunition isn’t just deadly-it’s smarter, faster, and more autonomous than ever before:
* Smart Artillery: The U.S.’s Excalibur shells and France’s BONUS rounds use GPS and laser guidance to hit targets with pinpoint accuracy.
* AI-Guided Bullets: The Pentagon is testing .50 cal self-steering rounds capable of adjusting course mid-air.
* Hypersonics: China’s DF-17, capable of reaching Mach 10, outpaces most U.S. prototypes.
* Drone Munitions: Turkey’s Bayraktar TB2 and Iran’s Shahed-136 have revolutionized low-cost, high-impact warfare.
* Autonomous Swarms: U.S. start-ups like Anduril are developing drone swarms guided by machine learning to overwhelm enemy defenses.
“Drones are the AK-47s of the 21st century,” notes strategist David Kilcullen. “They’re cheap, scalable, and changing who can wage war.”
While the U.S. and Europe innovate at the high end of the spectrum, new players are dominating mass-scale and cost-effective production.
Russia remains the largest producer of artillery shells by volume, reportedly manufacturing over 3 million shells annually-though sanctions have limited access to precision technologies.
South Korea and Turkey are the fastest-growing arms exporters. Seoul’s deal with Poland for co-production of howitzers and shells marks a historic pivot, while Ankara’s exports of drone-based munitions have surged 400% since 2020. India and Brazil are positioning themselves as affordable alternatives, investing heavily in drone-compatible munitions and smart artillery.
Global Demand: Where the Bullets Go?
Ukraine: uses an estimated 6,000 shells per day, creating demand that Europe struggles to meet.
* Africa: has become a dumping ground for cheap Chinese and Turkish weapons, fueling long-running internal conflicts.
* The Middle East: remains the world’s top arms consumer, with Saudi Arabia spending \$15 billion on weapons in 2023 alone.
* Asia-Pacific: nations like Taiwan, the Philippines, and Japan are ramping up stockpiles in anticipation of potential conflict with China.
While global defense stocks soar, the human cost is staggering. Conflict zones are being turned into testing grounds for the next generation of weaponry, and the faster munitions are produced, the faster they are used.
“We’re in an era of forever wars,” warns Rachel Stohl, director of the Stimson Center. “The arms trade is no longer just reactive-it’s proactive, shaping policy, alliances, and even public perception.”
And as the arms industry shifts toward just-in-time warfare-rapid production, globalized supply chains, and AI-assisted targeting-the line between defense and offense blurs further. The future of warfare-and by extension, the future of global power-belongs to those who can master the triad of technology, scale, and supply chain control
As conflicts evolve and the demand for “faster, smarter, deadlier” munitions rises, the arms trade has outgrown its Cold War-era identity. Today, it is a transnational economic system, complete with stock options, quarterly earnings, and government subsidies. In this system, ammunition is not just a tool of war-it is a product, and war itself becomes a marketplace.
The writer is Foreign Research Associate, Centre of Excellence, China Pakistan Economic Corridor, Islamabad.