The business of military contracting is booming in Southern California.
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The total value of defense contracts won by companies in Los Angeles County more than doubled in the last 10 years after adjusting for inflation, according to an analysis by CalMatters and The Markup. In the same period, the defense budget rose by about 19% in adjusted dollars.
The $15 billion in contracts won in LA County last year went largely to old-school defense contractors with headquarters elsewhere, like Boeing. But startups claimed a growing share of the pie, selling defense systems like low-cost missiles, drones, surveillance satellites, AI tools and much more. In 2025, 10 startups in the LA area were crowned “unicorns,” becoming companies valued by investments at more than $1 billion, according to the Los Angeles Business Journal. Most of those 10 companies were aerospace or defense businesses.
In 2015, 14 of the top 100 defense contracts won in California went to businesses focused on drones or space, according to the CalMatters and Markup analysis. By 2025, that share was up to 21. The shift is similar if measured by dollars, from 13%to 18%.
Details like whether you count obligations for where businesses are based or where the projects are launched all affect those numbers. By some counts the increases in contract dollars could be larger.
The contracts have been kindled by a surge of venture capital. Private investment in aerospace and defense since 2008 has fueled massive gains, according to a report from The Aerospace Corporation, a federally-funded nonprofit.
But all the new money is now causing awkward political tensions.
The war in Iran, which has depleted American munitions, is poised to drive demand even higher. The Trump administration’s latest budget proposal includes a record-setting $1.5 trillion for the military. Meanwhile, the Defense Department has signed off on the earliest contracts for the “Golden Dome,” a proposal to build a missile-defense system above the United States that may eventually cost hundreds of billions of dollars.
Most of the Golden Dome winners are based in or have ties to the Southern California area.
“You saw this huge rise in capital and now you’re seeing just much, much bigger government budgets for space,” said Sam Wilson, a researcher at the Aerospace Corporation.
The collision of venture capital and military spending has alarmed some advocates, who see a frightening trend toward privatization and the risk of a space arms race. Even Congressional Democrats are pushing back against the spending.
That’s noteworthy because it has tended “to be a bipartisan, equal effort to increase the budget” of the military, said Lindsay Koshgarian, director of the National Priorities Project, which tracks defense spending. “I think we are maybe seeing the limits of that now.”
Despite the pushback, some of the congressional districts that saw the largest defense contract increases in recent years are beneficiaries of signature Trump-era projects. Many are in solidly blue Los Angeles County, and among the most Democrat-leaning districts in the country.
California’s 36th Congressional District includes El Segundo, a high-tech defense hub outside Los Angeles. In the district’s 2024 House race, incumbent Democrat Ted Lieu took nearly 70 percent of the vote over a Republican challenger. The increase in defense contracts between 2015 and 2025 in that district alone was more than $3.3 billion.
Another district, California’s 43rd, is represented by Maxine Waters, who in 2021 signed on to the proposed No Militarization of Space Act, which described the Space Force as an unnecessary waste of resources and sought to abolish it.
Trump recently proposed to double the budget of the Space Force, another potential boon to the area. Meanwhile, Waters’ district has seen its share of obligated defense department spending grow over the last decade by more than $1.6 billion, or more than 500%, adjusted for inflation. Waters’ office didn’t respond to a request for comment.
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