When Forbes released its AI top 50 list last April, only one Orange County company made the cut. That’s despite California laying claim to thirty-five of the top fifty AI companies worldwide. OC, however, has untapped AI potential.
The vast majority of Forbes’ top AI companies are headquartered in the San Francisco Bay Area. The only SoCal standouts are Costa-Mesa-based Anduril and San-Diego-based Shield AI. In 2021, the Brookings Institution issued a report identifying fifteen U.S. cities driving the AI revolution. Unsurprisingly, the Bay Area emerged as “the nation’s dominant center for both AI research and commercialization activities.”
Los Angeles, San Diego, Santa Cruz, and Santa Barbara stood out as “early adopters” with “above-average involvement in AI activities.” No Orange County cities, however, received recognition. These reports beg the question: When it comes to AI development, what’s gone right in the rest of California, but wrong in Orange County?
The answer is, in part, public policy.
Brookings attributes the Bay Area’s AI dominance to “both public and private efforts.” UC Berkeley, for example, has world-class AI research facilities and programs. “Early adopter” cities like Los Angeles and San Diego also have strong research institutions. In the private sphere, the Bay Area has a world class network of venture capital firms, and companies like Alphabet, Meta, and Amazon drive commercial development.
Down south, Orange County has a wealth of public and private resources. OC has over forty universities and colleges, including standouts like Cal State Fullerton and UC Irvine. UC Irvine runs the Center for Machine Learning and Intelligent Systems and, just last month, the university launched ZotGPT, a custom AI chatbot designed for “faculty and staff to explore AI in a secure environment.”
Orange County also has great AI companies, hosting offices for Google, Meta, Amazon, Salesforce, Oracle, and IBM. Anduril, featured on Forbes AI top 50, is a homegrown success. Tech entrepreneur Palmer Luckey, a Long Beach local, headquartered the startup in Orange County to tap into the region’s militarycommunity. Andudril’s 640,000-square-foot corporate campus is the largest ever office lease in Costa Mesa, and the firm’s success has been a boon for the city.
OC already has the first two ingredients needed to create a local AI ecosystem: Universities and tech companies. The final ingredient is good public policy.
For a positive example on AI policy, Orange County should look north to San Jose. Last October, the San Jose mayor issued a memo directing city agencies to use AI tools to manage the municipal workload. The memo outlines a three-to-five year AI economic development plan and proposes expediting permits and reducing tax and energy rates to “foster a conducive environment for AI-related enterprises.” The overarching goal is to “support the launch and re-location of AI companies within San Jose City boundaries.”
Pro-innovation policies like San Jose’s attract entrepreneurs to the Bay Area, leading to high local patenting and startup rates, which fuel AI development. Last July, Brookings released a report identifying a number of public policy measures cities can implement to build new AI ecosystems, noting that “policymakers now have an opportunity to bring about more geographically inclusive development for one of the most important innovations of our time.” Orange County should take heed.
First, the county should implement a plan to fund and incentivize AI R&D at local universities and research hubs. OC should learn from Anduril’s success and focus on AIs tuned to local specializations, like military applications. For funding, local governments should target federal AI research grants, such as National Science Foundation programs like AI Research Institutes and Regional Innovation Engines.
OC cities should share data and computing resources, including industry-university collaboration. Here, again, military partnerships could prove invaluable, especially with regards to computational power. Orange County should also invest in public infrastructure needed for AI development. Picture data centers in Dana Point.
Lastly, and most importantly, OC must invest in talent and build a skilled AI workforce. A data-informed AI talent strategy to organize regional hiring activities and seek federal funding is essential.
Orange County’s largest industry is manufacturing. OC knows how to build. By prioritizing innovation and pursuing policy measures that supercharge R&D, Orange County can build the next AI hot spot right here in sunny Southern California.
Andy Jung is associate counsel at TechFreedom, a nonprofit, nonpartisan think tank focused on technology law and policy.
