New Jersey’s $500M Bet on AI

New Jersey Governor Phil Murphy signed a law Thursday establishing the Next New Jersey Program in hope of attracting artificial intelligence (AI) investment to the state.

Bill S3432/A4558 authorizes the New Jersey Economic Development Authority (NJEDA) to issue up to $500 million in tax credits through the program. It reallocates $500 million in tax credits originally allotted to the New Jersey Aspire Program and the Emerge Program to the Next New Jersey Program.

“AI has already started to revolutionize our everyday lives, and New Jersey is capitalizing on this moment to ensure we establish ourselves as a frontrunner in generative AI innovation,” said Governor Murphy. “The creation of this program will support the growth of AI-related businesses, which could lead to scientific breakthroughs and lifesaving discoveries right in our backyard. AI will be a transformative industry that will change lives and grow our economy and New Jersey is ready to take the lead.”

The Next New Jersey Program, administered by the NJEDA, will award tax credits to eligible businesses that are engaged in artificial intelligence work or large-scale artificial intelligence data centers. Artificial intelligence related activities could include developing new algorithms and techniques, such as machine learning and natural language processing; creating AI-powered software and hardware products, including for medical modeling; and developing AI chatbots for customer service.

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A business is considered primarily engaged in these industries if at least 50% of the business’s employees are engaged in AI-related activities, or at least 50% of the business’s revenue is generated from AI-related activities.  To be eligible, businesses must satisfy several criteria, including investing a minimum of $100 million at the qualified business facility and creating a minimum of 100 new full-time jobs in New Jersey. The tax credit applications must be submitted prior to March 1, 2029.

Roseland, New Jersey-based CoreWeave, a cloud provider for AI, operates a growing footprint of data centers covering every region of the U.S. and across Europe. "The signing of this bill is definitive proof that New Jersey is open for AI business,” said Brian Venturo, co-founder and Chief Strategy Officer at CoreWeave. “This not only reinforces New Jersey’s heritage as a state of innovators but also paves the way for significant advancements and opportunities in AI development.”

Last December, the Murphy Administration and Princeton University announced a partnership to develop an AI Hub , which is hoped to advance New Jersey’s leadership in the AI field and catalyze innovation in AI technologies. The AI Hub is expected to bring together industry leaders, researchers, and start-up companies to advance research and development in the emerging field. Last fall, Governor Murphy also established the AI Task Force , charged with studying emerging AI technologies and its societal impacts.

“The Next New Jersey Program will build upon the Garden State’s longstanding legacy in innovation and drive the state’s prominence in the rapidly growing AI industry, and create a strategic advantage for our innovators,” said NJEDA Chief Executive Officer Tim Sullivan. “AI presents an opportunity for new industry development in the state, good-paying jobs for our residents, and a stronger and more diverse economy for the next generation.”

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