War Profiteering: How Ukraine War Became Good Business For American Military–Industrial Complex

More than three years into the Russia–Ukraine war, as both nations endure mounting losses, the United States (US) has recorded extraordinary profits, particularly in its defence manufacturing and allied sectors. These windfalls have reinvigorated the American military–industrial complex: the web of US military, policymakers, and defence contractors whose fortunes appear to grow with every sustained or expanding conflict worldwide.

With billions, if not trillions, of dollars at stake, the military–industrial complex is known to exert considerable influence over American legislation and foreign policy. In this arrangement, war is not merely fought; it becomes a business sustained by demand.

A recent special report, Capitol Consensus: Where War is Business, published by the think tank Observer Research Foundation (ORF), documents the scope of this transformation in detail. The data reveal just how thoroughly the Ukraine conflict has reshaped both the global arms market and the US domestic defence industry.

Counting the Profits

Between 2020 and 2024, the period in which the Russia–Ukraine conflict erupted and hardened, the US share of global arms exports rose to 43 per cent, up from 35 per cent in the previous five years. American weapons reached more than 100 countries.

In 2024 alone, Foreign Military Sales reached nearly 118 billion dollars, almost half again higher than the year before, while Direct Commercial Sales by US defence firms exceeded 200 billion dollars. Between 2020 and 2024, these firms secured nearly 2.4 trillion dollars in Pentagon contracts, more than half of the Pentagon’s discretionary budget. A third of that went to just five companies: Lockheed Martin, RTX, General Dynamics, Northrop Grumman, and Boeing.

By comparison, US spending on diplomacy and humanitarian aid in the same period was barely more than what the single largest beneficiary of Pentagon contracts received during the same years.

Ukraine at the Centre

The Ukraine war has been the central driver of this surge. Global defence spending reached 2.72 trillion dollars in 2024, the steepest annual rise since the end of the Cold War.

Nearly half of Ukraine’s arms over the past four years have come from the US, turning the country into the world’s largest importer of weapons. From near zero a decade ago, Ukraine now accounts for almost a tenth of global demand. For US contractors, this has meant reliable orders and robust revenues. For investors, it has signalled sustained demand.

Beyond conventional arms, Ukraine has also become a testing ground for defence-technology start-ups. Local firms have attracted tens of millions in venture capital, expected to top 100 million dollars by 2025, much of it channelled through Kyiv’s BRAVE1 platform.

Companies such as Swarmer (artificial intelligence drones), Osavul (disinformation tools), and Tencore (robotics) have drawn backing from Western investors. Even the European Union (EU) is seeking to benefit from the defence-tech opportunity presented by the war. In 2025, it partnered with Ukraine on BraveTech EU, a 100-million-euro programme designed to integrate Ukraine into Europe’s defence-innovation ecosystem.

The financial markets have also reflected this momentum. Since the start of the conflict, the Standard & Poor’s (S&P) Aerospace and Defence Index has risen nearly 90 per cent, far outpacing the broader S&P 500. Challenger firms have seen striking gains. Palantir grew from 13 billion dollars in 2022 to more than 443 billion in 2025, while Anduril doubled its valuation to 30.5 billion.

Defence-focused funds have multiplied from just four in 2022 to 27 in 2025, signalling how attractive the sector has become to investors.

Industry Perspective

US defence industry leaders present a different view of such gains. They point to jobs supported by defence contracts, particularly in regions where manufacturing employment is limited, and to the technological innovations that have historically spilled over into civilian life, such as the Global Positioning System (GPS) and the internet.

They also argue that maintaining domestic capacity is a strategic need, especially in an era of renewed competition with China and Russia. From this perspective, arms sales abroad are portrayed as strengthening alliances and ensuring interoperability.

Industrial-Sized Influence

The structure of the US defence sector, however, raises serious questions. The number of prime contractors has shrunk from 51 at the end of the Cold War to just five today, concentrating influence in a handful of firms that already receive a third of Pentagon contracts. These companies wield political weight through lobbying and the revolving door between government and industry.

Between 2018 and 2023, the top five contractors spent almost 300 million dollars on lobbying and employed more than 600 former Pentagon officials. Such connections blur the line between public interest and corporate gain. Critics argue this creates a cycle where military solutions are privileged over diplomatic alternatives, not necessarily because they are the most effective, but because they sustain the system on which so many depend.

When Peace Does Not Pay

The Ukraine conflict has delivered unprecedented profits to US defence contractors while also energising a new generation of players. This success carries risks. With billions at stake and an expanding ecosystem reliant on ongoing demand, there is a real temptation to view conflict as a market opportunity.

The worrying pattern is clear: instability generates orders, and prolonged wars guarantee steady returns. In such a system, peace is often not the most rewarding outcome.