With investments from the state, an all-drone Air Force base, and high-tech talent, North Dakota has become hotbed for drone companies
Quentin Hardy / New York Times : Tweets: @pegobry Tweets: Peg / @pegobry : “ In 2001, Microsoft paid $1.1 billion for Great Plains Software of Fargo, and it now has an office there.” http://www.nytimes.com/...
Context & Ripple Effects
This 2015 piece caught North Dakota assembling a drone cluster from three inputs the state could actually supply: public money, an all-drone Air Force base, and a tech talent pool seeded when Microsoft bought Great Plains Software of Fargo and kept an office there. At the time it read as a regional curiosity — one flyover state betting on unmanned aircraft.
The years since made it a template. [[a:963610|Anduril and other startups began building military-ready, self-piloted drones away from Silicon Valley]], where such work turned politically untenable; Skydio's $171M round became the first major fundraising by a US drone maker after China's DJI was blacklisted; and by 2022 the FT counted roughly 65 US startups focused on drone software and AI, often for military uses. The North Dakota model — state capital plus military infrastructure plus talent — is the pattern those later moves follow.
First-order effects
- Drone companies locating in North Dakota get what they cannot buy on the coasts: direct access to Air Force flight operations and test range, plus state investment that de-risks early hardware bets.
- Microsoft's Fargo office gives the cluster a local engineering labor base, letting drone firms hire outside the Bay Area wage market.
Second-order effects
- Other states are pushed into bidding wars over defense-adjacent manufacturing siting, because the North Dakota package shows that base infrastructure plus public money can substitute for venture-density geography.
- As federal procurement pivots away from Chinese-made drones toward domestic suppliers, US makers like Skydio gain a funding lane — and siting near military facilities becomes a competitive advantage in winning that business.
Third-order effects
- If the pattern holds, the US drone and defense-AI industry structurally decouples from Silicon Valley and re-clusters around state-backed, military-adjacent hubs — with industrial policy, not consumer markets, deciding where hardware AI gets built.
The trend: US drone and defense technology is migrating out of coastal tech hubs toward state-funded, military-anchored clusters, with North Dakota as an early proof point.