New Jersey taps the private sector to facilitate AI innovation and talent
Nitat Termmeem via Getty Images
Under two new programs, the state aims to leverage the private sector to help advance its goal of leading in artificial technology innovation.
State and local governments across the nation are increasingly exploring how artificial intelligence could help reduce workloads, streamline operations and improve service delivery to residents. From public transit to disaster recovery response, artificial intelligence is quickly becoming a valuable tool for governments.
As AI becomes more pervasive in government operations and services, New Jersey officials are moving to position the state as a leader in the technology, which is estimated to reach a market size of $244.22 billion this year.
The New Jersey Economic Development Authority, or NJEDA, is spearheading two programs aimed at fostering AI innovation and developing tech talent in the state, officials announced last month.
“Through all lenses, we are looking to support job creation,” said Kathleen Coviello, chief economic transformation officer at NJEDA. “We have an extremely talented workforce, and so making sure that we participate in this new industry is going to be paramount to our success.”
One initiative launched by NJEDA is the $3.8 million AI Innovation Challenge Administration Grant Program, under which applicants will be tasked with developing AI software solutions to government problems based on the state’s open data sets. For instance, Coviello said that applicants can submit projects aimed at improving permitting processes or enhancing traffic management.
Program participants will have the opportunity to showcase their software prototypes in a competition, and winners will be selected to further advance their products into a minimum viable product, Coviello said. NJEDA is working to choose a program administrator to work more closely with participants before the agency starts accepting applications.
The ultimate goal is to help grantees reach a pilot testing phase or commercialization of the AI-based software solution with the mentorship and support from the program’s administrator.
The state is also launching the Next New Jersey AI tax credit program, which was signed into law last year by Gov. Phil Murphy. The $500 million initiative aims to spur business investment in data centers and other AI-related activities.
“We think our program is a bit unique in that it doesn’t just give sales and use tax credits — that’s what a lot of our neighboring states are doing,” Coviello said. “We really want it to be an economic engine and driver, and to do so [the program] has a jobs component.”
To be eligible for the tax credit program, NJEDA requires that businesses commit to create at least 100 full-time positions. Jobs generated by businesses in the program can be located anywhere in the state, not just at the data centers, she said. Officials just want to see that the program is fostering access and connection to the state’s tech talent and workforce.
Tax credit awardees must also agree to collaborate with a public or private university, tech startup or other entity to support AI innovation.
“We want more than just data centers here. We want operations. We want leadership. We want thought leaders,” Coviello said.
New Jersey has moved swiftly to support the budding AI industry under Gov. Phil Murphy in recent years with the creation of the state’s AI Task Force in 2023, which is aimed at informing leaders on the effective and ethical use of AI in government, and the state’s first chief AI strategist role established in 2024, who was tasked with advancing AI innovation in the public and private sector.
But government knows that “we don’t know everything,” Coviello said. “And if we can partner with private [sector] folks, we’re happy to do so because it’ll help us scale quicker [and] help us be more efficient.”