San Diego
Beyond the Capitals: Where Durable Alliances Get Built
Somewhere in the Indo-Pacific this year, inside a shipping container that looks like every other, a machine built by a San Diego company is printing the tools of a war that has not yet been fought. The container is Firestorm's xCell. Funded through the Department of War's APFIT program, the company has begun fielding it to operational units in the Indo-Pacific, its first deployment outside the continental United States. What it does is mundane and radical: manufacturing combat drones at the edge, in under a day, wherever operators and warfighters need them.
The frontlines of conflict are evolving rapidly and increasingly being defined by the asymmetric, decentralized warfare of this century. It is playing out in the fields of the Donbas and the waters of the Taiwan Strait. Firestorm is rightfully recognized for its ingenuity and focus on the needs of operators, but it is only one among a cluster of thoughtful risk-takers solving hard problems. To find the systems and relationships that will win on the twenty-first-century battlefield, you have to leave the capitals.
The institutions are moving in a new direction and opening the aperture for experimentation. At the June 18 NATO Defense Ministerial in Brussels, the War Department framed its vision for NATO 3.0. The framing asks Europe to carry more of its own conventional defense and prioritizes a re-industrialized allied manufacturing base. The hard question of what that manufacturing base requires often collapses around one frame: de-risk.
Friend-shore the supply chain. Qualify a second source. Cut a dependency.
All of them are sensible, largely insufficient, and miss what is happening on the frontlines. De-risking is the floor, not the frontier.
We have adapted to the demands of rapid change before, and it didn't happen in a capital. The engine that carried the P-51 Mustang and escorted Allied bombers all the way to Berlin was a British Rolls-Royce Merlin, designed in Derby. What made it a partnership was the airframe: American, built by North American Aviation to a British requirement. A Rolls-Royce test pilot, Ronald Harker, flew an early Mustang in 1942 and saw that the British engine belonged in the American aircraft. Two nations put their best into one machine.
London and Washington opened the space. The hard part was what Rolls-Royce and Packard did inside it. Rolls-Royce had designed a superb engine and built it like a craft, hand-fitted and slow. Packard's contribution was scale: mass production, interchangeable parts, an engine a broader workforce could build and a mechanic could keep flying in the field. And the lesson ran both ways. Rolls-Royce carried those production methods back into its own British engines. The durable return was not a better blueprint. It was learning to build the thing at scale, together. They did not de-risk each other's supply chains. They built a hard thing, and it won. Decades on, the proof still flies: the growl of a Merlin over a P-51, the signature of what a partnership makes when the space is there.
As the relationships get negotiated in the capitals, the builders are already at work, betting on the technology that will shape the future of warfare. One place you can see it is hypersonics. San Diego's Kratos is pairing its Zeus boost motors, produced in Camden, Arkansas, with Brisbane's Hypersonix DART AE scramjet, building what the companies describe as a system meant to fly more than five times the speed of sound, over a mile every second. In 2023 the two firms signed an exclusive teaming agreement and the work of fitting one company's hardware to the other's is underway.
As of June 2026 the combined Kratos-Zeus and DART AE system has not flown. In February the DART AE scramjet made its first hypersonic flight on a separate U.S. test program, carried by a Rocket Lab booster, proving out the vehicle that Kratos has committed to pair with its Zeus motors. The work continues. Around them, the United States, Britain, and Australia have agreed to pool their hypersonic flight tests through AUKUS. The governments opened the door. What comes through it, real integration or only shared test runs, will be settled by the people doing the hard work.
This is what no request for information can frame. The edge comes from integrating the best each partner brings, and seeing the hardest problems together. The window opens when governments resolve the classification and release authorities that make building the hard thing together legal. The builders who forge partnerships that open through values, deepen through work, and align incentives will create the durability that holds when the pressure is turned up. Industrial advantage will be determined by relationships, not RFIs.
A recent Carnegie study found that only a handful of allied programs reach genuine co-design. The question it leaves open is where co-design actually gets built. The answer is often in the cities beyond the capital.
That is playing out in San Diego right now. If relationships are the advantage, three questions help find them.
Who is closing the gap? The operators who move while the institutions wait for the next budget cycle. This spring Seasats, a San Diego company, sent its Lightfish uncrewed vessel through what it calls the first autonomous transit of the Taiwan Strait, tracking Chinese naval activity along the way. Seasats has turned that operational nerve into scale, with more than $100 million in defense contracts and a new San Diego line ramping toward roughly a boat a day. Attention, converted into capability in the water where the next contest will be decided.
Who has access to the action? The companies already in the fight, learning at the speed of combat. Shield AI flies its V-BAT drones over Ukraine, more than a hundred and thirty sorties by last spring, run in part from a Kyiv office where Shield AI engineers work beside Ukrainian forces, hardening the aircraft against Russian jamming in the only place that verdict is real. As the company's Ukraine lead, James Lythgoe makes clear, "For defense companies, legitimacy is no longer earned in labs, test ranges, or exercises. It is earned on the battlefield." That battlefield legitimacy is converting into allied demand: in June 2026 Poland's navy contracted for V-BAT to fly maritime ISR.
Who do you trust to build with? The allies who show up once the alliance clears the way. The year Sweden joined NATO, Saab opened a U.S. innovation hub in Point Loma. Membership was the institutional opening; San Diego was where the company chose to spend it. Saab brought a Combat Boat 90, ran it on the same Autonomous Ocean Core software as its Swedish sister hull, and put it in the water off Point Loma, proving the systems next to the operators and customers it wants to serve. Within its first year, the hub was delivering on nine Department of Defense contracts. The alliance opened the door. The company walked through it, and set up in a city already full of people building what comes next.
A city positioned exactly where the Department of War is looking is not a liability to NATO's European members. Defense accounts for roughly a fifth of San Diego's economy. For a specific set of capabilities it is the node most worth being tied to, at the intersection of Pacific Fleet command, maritime unmanned systems, and the AUKUS and NATO industrial overlap.
San Diego is not the only such node, nor should it pretend to be. Other cities are racing to hold other capacities, against their own competitors. Success and sustained relevance will rely on the openings that emerge and the builders rapidly deploying innovative systems to the battlefields and waterways where the risks are shifting.
The durable advantage is the chance to leverage multiple strategic clusters, the relationships that build them, and the hard work between them, into a security and economic partnership sturdier than any one capital can direct. AUKUS and NATO are distinct architectures, but the advantage compounds when what is proven in one theater can flow to the other. In great-power competition, the tools and the relationships that win do not become more regional. They become more global.
De-risking a modern supply chain is not the same as building one. The people who are leaning into the moment and testing the solutions of the future are already moving ahead.
The questions that lead them and the partnerships they forge will define the alliance's industrial layer, and its ability to thrive in twenty-first-century warfare. They are being answered, every day, in the cities where smart people do hard work.