South Florida is trending toward becominga defense industry hubalong the lines of Northern Virginia.
Daniel Kahan, a lawyer who handles financial transactions for emerging companies, especially in the technologyand defense sectors believes that trajectory is taking shape.
Kahan is a South Florida native who worked at IBM in Boca Raton before attended law school at Georgetown University in Washington, D.C. He subsequently stayed in the D.C. area and worked heavily with defense-related businesses.
A decade ago, Kahan moved back to South Florida for personal reasons, but frequently traveled to Washington to attend to tech-related clients in Northern Virginia, across the river from the Pentagon.
Now, Kahan, a partner in the Miami office of the King
& Spaulding law firm, said many of his defense tech industry clients have moved or expanded to South Florida.
"I see a lot of my tech clients now more in person (because of) how often they're here," Kahan said. "It's never been easier to see people."
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New companies, investors fuel South Florida growth in defense sector
Kahan's observations reflect the growing surge of defense-related companies moving into South Florida.
The region long has been a major base for defense contractors, including manufacturers of fighter jet and rocket engines.
But companies developing new technology for the battlefield, as well as in space, are joining longstanding existing defense contractors. Artificial intelligence, cybersecurity and other tech advances also are attracting existing firms or creating new ones.
In recent years, Palm Beach County's status has risen not only as a business destination but also a political powerhouse, given President Donald Trump's Mar-a-Lago residence in Palm Beach. Meanwhile, investors who moved to South Florida since the 2020 COVID 19 pandemic are willing to deploy capital to new weapon-related ventures just as the federal government boosts defense spending.
This year saw two major defense-related corporate relocations to South Florida.
In January, Ondas moved its headquarters to West Palm Beach from Boston. The diversified drone and robotics company made the move to attract new talent and tap investors,said Ondas Chief Executive Eric Brock.
Meanwhile, AI software firm Palantir moved its headquarters to Miami from Denver. Palantir works with U.S. Immigration and Customs Enforcement, or ICE, the Central Intelligence Agency, and other countries' militaries.
In a February interview, Shon Manasco, Palantir's international defense leader, said the company's presence in South Florida sends a message to other defense-related companies: "This signals this is a place where we can create an ecosystem."
Investments firms active in these fields are moving fast to be a part of South Florida's growing defense activity.
Menlo-Calif.-based Andreesen Horowitz is openinga regional office inWest Palm Beach to concentrate on investments in the defense industry through its $1.2 billion American Dynamism fund.
In addition, West Palm Beach-based HighPost Capital, a private investment fund, recently created a new investment fund focused on aerospace, defense, intelligence and national security. Mark Bezos, brother of Amazon founder Jeff Bezos, is a founding partner in HighPost.
Kahan said South Florida's unique political and investment environment is rising just as the United States seeks a more dominant role in the Western Hemisphere. This is important in Florida because of its U.S. military operations, especially the Southern Command in Miami-Dade County, he said.
New universities likely to boost research, innovation in region
In addition to defense industry growth, Kahan said he's also heartened to see major investments by South Florida billionaires Stephen Ross and Ken Griffin in higher education. Universities are key to helping foster technology innovation, Kahan said.
Ross contributed $50 million toward a $520 million graduate business campus for Vanderbilt University in West Palm Beach. The campus, planned for a section of the downtown known as Government Hill, will host up to 1,000 students.
Graduate programs will include finance, management, engineering space technology, and defense technology and manufacturing. Artificial intelligence and data science will be integrated throughout the curriculums. So far, the private Nashville-based school has raised $400 millionfor the West Palm Beach campus, which is expected to start construction in mid-2027.
Meanwhile, on Sept. 30, Carnegie-Mellon University announced it will create a Miami campus for undergraduate, graduate and doctoral students. The planned 3,500-student campus is being built as part of a $3 billion donation to the Pittsburgh university by financier Ken Griffin. The Carnegie Mellon University in Miami will focus on health and biological discovery, national security and strategic capabilities, and energy and climate resilience.
"Carnegie Mellon is one of the nation's top producers of AI engineering talent," Kahan said. "It's notable they want defense to part of their program."
Palm Beach County's long history with defense, aerospace companies
In the 1960s, Pratt & Whitney established a facility in western Palm Beach County that handles jet engine development and rocket testing. Lockheed Martin, Rocketdyne and other major defense companies also have facilities in the county.
Today, the aerospace, aviation and engineering industries employ 21,000 people in nearly 2,000 firms in Palm Beach County, according to the Business Development Board of Palm Beach County, the county's business recruitment arm.
Although defense tech isn't new to Palm Beach County, what is new is the growing of an entrepreneurial sector of the defense industry similar to Northern Virginia.
The confluence of top universities, homegrown entrepreneurs, private investment and corporate relocations are combining to create what Kahan believes will be a deepening defense industry in South Florida.
He doesn't think it's a short-term bet.
"The things we’re seeing are pretty concrete," Kahan said. "Businesses) are signing leases and relocating people. That’s a signal of an intent to do business here."
Alexandra Clough is a business writer at The Palm Beach Post. You can reach her at aclough@pbpost.com. X: @acloughpbp. Help support our journalism. Subscribe today.
This article originally appeared on Palm Beach Post: Why South Florida is primed to become defense hub | Exclusive
