The New Jersey Economic Development Authority (NJEDA) Board has approved the creation of the Next New Jersey Program – AI and the AI Innovation Challenge Administration Grant Program, which build on Gov. Phil Murphy’s goal of establishing the state as a leader in AI by encouraging private investment into New Jersey’s growing AI sector and promoting collaboration between citizens and government in AI innovation.
“AI presents a tremendous economic opportunity for New Jersey, poised to create good-paying jobs, catalyze new discoveries, grow our start-up community, and foster long-term economic growth,” said Murphy. “New Jersey’s continued investment in the sectors of the future will pay dividends for generations to come, setting the Garden State on a path of economic strength and prosperity.”
The Next New Jersey Program – AI will provide tax credits to eligible businesses investing in large-scale AI data centers and companies engaging in AI-related activities. The $500 million program leverages AI to stimulate innovation, boost productivity, and attract high-tech investments, positioning New Jersey as a key player in the rapidly evolving AI economy.
A business must commit to creating at least 100 new full-time jobs and meet a minimum capital investment of $100 million to be eligible for tax credits. Additionally, the program requires that the business enter into a collaborative relationship with a New Jersey-based public or private research university, technology startup, incubator, accelerator, or similar entity. For more information, including additional eligibility requirements, click here.
The AI Innovation Challenge Administration Grant Program will provide $3.8 million in grant funding to an eligible administrator through a competitive application process. The administrator will develop and manage a statewide AI Challenge and disburse sub-grant awards to challenge winners. The NJEDA-approved administrator’s creation of the AI Challenge will promote participation from a diverse array of stakeholders across New Jersey to identify challenges throughout the State, and leverage AI to develop innovative software solutions that advance social and public good.
The AI Challenge will include an initial competitive event and virtual showcase where participants will create and present AI-based software prototypes. Winners from the initial competitive event will continue developing their prototypes towards a Minimum Viable Product and present their solutions at a demo day event. After the demo day event, winners will continue working with the Administrator on pilot testing or commercialization of the AI-based software solution. Winners will also receive mentorship and advisory support from the Administrator’s network of subject matter experts.
Applications for the AI Innovation Challenge Administration Grant Program will open during a defined application period following a Notice of Funding Availability being published on the NJEDA’s website. Entities interested in applying for the Grant Program are recommended to start the New Jersey business registration and tax clearance certificate process early to ensure timely submission and processing of applications in compliance with the NJEDA’s eligibility requirements.
The two programs approved today are part of Governor Murphy and the NJEDA’s efforts to expand state resources for the AI sector. In 2023, the Murphy Administration and Princeton University announced a partnership to develop an AI Hub, which will advance New Jersey’s leadership in the field and catalyze innovation in AI technologies. In February, Governor Murphy and Princeton University announced Microsoft and CoreWeave as founding partners of the AI Hub, helping position New Jersey as a leading East Coast center for AI innovation. The NJEDA also approved the creation of a dedicated AI cohort within the New Jersey Innovation Fellows Program (NJIF) in 2024, which will provide income replacement grants of up to $400,000 to eligible entrepreneur teams looking to launch an AI-driven business.
“Under Governor Murphy’s leadership, the NJEDA has focused on supporting cutting-edge industries like AI, creating family-sustaining jobs for residents and bolstering the state’s innovation economy,” said NJEDA Chief Executive Officer Tim Sullivan. “AI offers a multitude of economic opportunities for the state’s entrepreneurs, businesses, and residents, and these new initiatives will ensure that companies and industry stakeholders have the opportunity and resources needed to invest in AI and contribute to its ongoing growth and evolution.”