The New Jersey Economic Development Authority (NJEDA) Board has approved two new initiatives aimed at solidifying New Jersey’s position as a leader in AI; the Next New Jersey Program – AI and the AI Innovation Challenge Administration Grant Program. Both programs align with Gov. Phil Murphy’s vision to grow the state’s AI sector by driving private investment and encouraging collaboration between government, research institutions, and technology innovators.
Next New Jersey Program – AI
The $500 million Next New Jersey Program – AI will stimulate economic growth by offering tax credits to businesses that invest in large-scale AI data centers or engage in AI-related activities. To qualify, businesses must create at least 100 new full-time jobs and invest a minimum of $100 million in AI infrastructure. Additionally, participating companies must collaborate with a New Jersey-based public or private research institution, technology startup, or incubator to drive AI innovation.
AI Innovation Challenge Administration Grant Program
The AI Innovation Challenge Administration Grant Program will allocate $3.8 million in grant funding to an administrator responsible for managing a statewide AI Challenge. This initiative will engage a diverse group of stakeholders across New Jersey to develop AI-based solutions addressing public and social challenges. The challenge will include a competitive event, a virtual showcase of AI prototypes, and a demo day where winners will advance their prototypes to Minimum Viable Product (MVP) status and receive ongoing mentorship and pilot support.
Ongoing AI Expansion Efforts
These initiatives build on the Murphy Administration’s broader strategy to strengthen New Jersey’s innovation economy. In 2023, Gov. Murphy and Princeton University announced the creation of an AI Hub, with Microsoft and CoreWeave joining as founding partners in 2025. Additionally, the NJEDA introduced a dedicated AI cohort within the New Jersey Innovation Fellows Program (NJIF) to support AI-driven startups with grants of up to $400,000.
