This escalation between major powers is driven by shifting global power balances, intensified geopolitical tensions, proxy wars, and rapid advancements in fields such as artificial intelligence (AI) and quantum computing. The activities and profits of arms companies have surged as a result.

MILITARY SPENDING SOARS

According to the Stockholm International Peace Research Institute (SIPRI), global military expenditures, adjusted for inflation, have risen from $1.204 trillion in 2000 to $1.944 trillion in 2010 and reached $2.394 trillion in 2023. In Europe, military spending increased from $301 billion in 2000 to $569 billion in 2023.

The most significant increases were observed in China, with expenditures rising from $43 billion to $134 billion and then to $309 billion. Russia's military spending also grew from $22 billion to $46 billion and then to $63 billion. In contrast, the U.S. military budget, which was $875 billion in 2010, remained relatively stable at $880 billion in 2023. India's military spending rose from $31 billion in 2000 to $83 billion in 2023, marking another notable increase.

ADVANCEMENTS IN MILITARY TECHNOLOGIES

Technological advancements in military fields are further fueling the arms race. Nations are not only expanding their traditional military arsenals but are also investing heavily in technologies such as hypersonic missiles, autonomous drones, and AI for military applications.

For instance, a recent Economist report highlighted China's significant progress in developing hypersonic weapons and integrating AI into its military strategy. The commissioning of China's advanced aircraft carrier, Fujian, and the expansion of its navy have raised concerns in the U.S. The U.S. Navy anticipates that China's naval fleet could increase by 40 percent by 2040 compared to 2020.

The arms race now includes AI and cyber capabilities. Countries are focusing on "smart warfare" strategies, employing AI for various tasks, from guided missile systems to autonomous combat systems. China's civil-military collaboration and coordination facilitate the integration of technological advancements from the private sector into military applications. AI is increasingly used in military robotics, drones, and cybersecurity operations.

Cyber warfare has also become a critical area of competition. The strategic importance of large-scale cyberattacks aimed at gathering intelligence and disrupting enemy infrastructure and systems, such as general elections, is growing.

INDUSTRY RESURGENCE

The development and production of weapon technologies have led to a noticeable resurgence in related industries. According to Jan Pie, Secretary General of the Aerospace and Defense Industries Association of Europe (ASD), "Defense sector orders are experiencing the most significant increases since the end of the Cold War" (Financial Times). A survey by the Financial Times of 20 major and mid-sized U.S. and European defense and aerospace companies revealed that these firms plan to hire tens of thousands of employees this year.

For example, in the U.S., Lockheed Martin, Northrop Grumman, and General Dynamics aim to recruit nearly 6,000 new employees. Ten companies surveyed plan to increase their workforce by 37,000, or nearly 10 percent of their total workforce. In the U.K., BAE Systems and Japan's Mitsubishi Heavy Industries plan to hire 6,000 new employees by the end of 2024 for their new joint fighter jet project, with additional hiring of 8,000 to 10,000 positions, particularly in engineering and software, expected between 2025 and 2028. In Germany, Rheinmetall and Nammo, and in France, Thales and Dassault Aviation, also plan to hire thousands of new personnel.

The declining hegemony, the rise of new powers, and the geopolitical competition between them are perpetuating the arms race, which in turn boosts corporate profits, investments, and employment. This cycle inevitably sustains the dynamics of the ongoing arms race, creating a vicious circle.