Can San Diego carve out a place in race for artificial intelligence innovation?

Artificial Intelligence is jockeying to become the focal point of U.S. technology innovation in coming years, and San Diego is among the cities well positioned to be a frontrunner in this looming AI race.

A new report from the Metropolitan Policy Program at the Brookings Institution ranked more than 360 cities based on their AI economic prowess.

Bay Area metros — San Francisco and San Jose—- topped the list, according to Brookings, a public policy think tank based in Washington, D.C. They were followed by 13 “earlier adopter” cities that managed to claw out a toehold in AI, including San Diego.

“Not everywhere should be looking to artificial intelligence for a major change in its economy, but places like San Diego really need to,” said Mark Muro, a Brookings fellow and co-author of the report. “I think the costs of being out of position on it are pretty high for San Diego, and the benefits of leveraging it fully are really high.”

To rank cities, Brookings combined data on federal research grants, AI academic papers, AI patents, job postings and AI-related companies, among other factors.

Besides San Diego, Los Angeles, Seattle, Boston, Austin, Washington, D.C., and Raleigh, N.C., are in strong positions. Smaller cities with significant AI footprints relative to their size include Santa Barbara, Santa Cruz, Boulder, Colo., Lincoln, Neb., and Santa Fe, N.M.

An additional 87 cities have the potential to become players but so far have limited AI activities, according to the study.

For most of us. AI is best known through recommendations that pop up on Amazon or Spotify, when smart speakers answer voice commands, or when navigation apps give turn-by-turn directions.

But AI is much more than that, with the potential to permeate thousands of industries. It could prevent power outages and help heal grids quickly, better route shipping to cut emissions, aid in medical diagnoses, and power navigation for self-driving vehicles.

Muro said Brookings undertook the research after receiving requests from economic development officials.

“They watched the digitization of everything during the pandemic,” he said. “They’re asking where do we stand on these advanced digital technologies? How do we engage with this?”

As with other technologies, artificial intelligence tends to be clustered on the coasts. Of the 363 metro areas in the study, 261 had no significant AI footprint.

“This is not everywhere,” said Muro. “But we think there can be a happy medium where we retain our coastal innovation centers while also taking steps to help other places make progress and counter some of this massive concentration.”

In San Diego, companies such as Qualcomm, Oracle, Intuit, Teradata, Cubic, Viasat, Thermo Fisher and Illumina develop artificial intelligence and machine learning algorithms.

But key drivers of the region’s AI prowess stems from the military and universities.

The Naval Information Warfare Systems Command (NAVWAR) is based locally, creating a magnet for defense contractors and cyber security firms working in AI.

“San Diego’s affiliation with the military has been extremely important,” said Nate Kelley, senior researcher at the San Diego Regional Economic Development Corp. “There are more and more contracts coming, particularly through NAVWAR. Those federal contracts tend to be large, and they’re multi-year. So, they’re less vulnerable to business cycles.”

UC San Diego was an early researcher in neural networks, said Rajesh Gupta, director of the Halicioglu Data Sciences Institute. That work helped pave the way for the machine learning engines that banks use to uncover credit card transaction fraud.

Gupta thinks the Brookings report underestimates San Diego’s AI capabilities. This summer, a new AI Research Institute at UCSD won a $20 million grant from the National Science Foundation to tackle big, complicated problems.

Among them: tapping artificial intelligence to cut the time and cost of designing semiconductors; finding ways to improve communications networks; and researching how robots interact with humans to make self-driving cars safer.

The San Diego Super Computer Center also performs research related to AI, and the San Diego Association of Governments (SANDAG) has been an early proponent of AI-based smart cities technologies, said Gupta.

“We have a $39 million effort going on today basically on grid response and making it intelligent,” said Gupta. “It’s smart buildings, smart parking, smart transportation. These are what will define the metropolitan areas of tomorrow with AI embedded in them.”