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San Diego tops nearly every other US county for defense spending

STEM day at San Diego Fleet Week 2021
Cpl. Levi Voss / U.S. Marine Corps
A child interacts with an XM1216 small unmanned ground vehicle during STEM day for San Diego Fleet Week 2021 at the Broadway Pier near downtown San Diego, Nov. 4, 2021.

The Pentagon released a new report showing San Diego County is one of the top areas in the nation for defense spending.

San Diego County receives more money from the Pentagon than almost any other county in the country. A new report by the Department of Defense Office of Local Defense Community Cooperation shows that more money flows into the local economy than is spent in 37 states.

“You have a ton of customers in the San Diego area,” said Brandon Tseng, co-founder of the San Diego-based Shield AI.

The former Navy SEAL co-founded the artificial intelligence and drone company in 2015. It’s now one of the fastest-growing defense contractors in the county.

“As an entrepreneur that wanted to bring AI and autonomy to the US military, I couldn't think of a better place to be when you think about starting a Defense technology company and having that proximity to the customer,” he said.

Shield AI specializes in software to supplement the skills of pilots, potentially allowing them to operate in environments without GPS. The company's drones can operate independently from troops from the ground.

San Diego tops nearly every other U.S. county for defense spending

Though most buying decisions still happen in Washington, Tseng says even his Bay-area investors told him it was better to be closer to people using the tech, and San Diego has one of the largest concentrations of US military forces in the nation.

“You're just able to build a better product when you're speaking with the people who are going to be using that product,” he said.

Aside from money going to defense contractors, San Diego County leads the country in the amount spent on military payroll. More than $7 billion was spent locally on personnel in 2020, well above the second-largest payroll, Honolulu Hawaii, according to the report.

Overall, California is the third highest-grossing state for military spending, behind Texas and Virginia. The Pentagon spent $61 billion in California in 2020, roughly $10 billion more than the Pentagon spent in the state in 2013.

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