Aaron Price is the President & CEO of TechUnited: NJ. – TechUnited: NJ
In a recent hearing before the New Jersey State Senate’s Energy and Technology Committee where TechUnited: NJ provided testimony, the conversation centered around a pivotal question: Can New Jersey provide the energy and infrastructure needed to power the AI revolution, or will we continue to lose startups and growth-stage companies to other states? I was honored to have the opportunity to testify and share insights on this pressing issue.
The AI industry is projected to be a $1.3 trillion market by 2032, growing at an impressive 20% annually. This growth presents a rare second chance for New Jersey to capture a significant share of this market, potentially bringing tens of billions of dollars in investment, jobs, and new company formation. However, without reliable, affordable, high-density power, AI-driven businesses will continue to choose states like Virginia, Texas, and North Carolina, where power is cheaper, permitting is streamlined, and grid modernization is already underway.
During the hearing, it became evident that the focus was heavily on grid modernization and energy usage, with testimonies from major utility companies like PSE&G, JCP&L, and Atlantic City Electric. “We want to do more on the supply side and generation side,” a representative from PSE&G noted, highlighting the need for proactive measures in energy supply. Meanwhile, a PJM representative expressed surprise at the dissatisfaction with current market arrangements, acknowledging the challenges associated with the 20-30% rate increase on schedule for this summer.
While these discussions are crucial, the tech community must also emphasize the role of AI in creating a more resilient, low-cost energy supply. AI-driven smart grids can cut peak energy costs by 20%, prevent blackouts, and enhance overall energy efficiency. As one participant aptly put it, “The energy demands are enormous, and it’s beholden upon us to act quickly,” shared Brian Klingbeil, Chief Strategy Officer at Global IT Managed Services company, Ensono.
New Jersey’s unique geographic position offers a once-in-a-generation advantage in the AI era. We sit at the crossroads of major data exchanges, making us ideally suited for AI inference—the real-time processing of AI models. This proximity to major business centers like New York City positions us to host data centers for AI inference, a competitive landscape we can win with the right incentives.
To secure New Jersey’s place in the AI economy, we must take decisive steps:
- Provide Targeted Energy Incentives: Encourage startups and growth-stage tech companies to establish and expand their operations in New Jersey.
- Support Public-Private Partnerships: Foster collaboration for AI and energy research to drive innovation and economic growth by fostering university, corporate and non-profit partnerships.
- Educate the Community: Fund initiatives to raise awareness about the impacts of AI and the economic opportunities it presents.
- Lean into our strengths: Geography isn’t critical for all AI, such as training models, but for inference, proximity can be a major differentiation. NJ’s location among a major global market gives it an opportunity to capitalize on this strength.
For too long, New Jersey has watched promising startups leave for other states. This is our moment to change the narrative. By investing in the right energy infrastructure today, we can ensure that New Jersey becomes a leader in the AI-driven economy of tomorrow. Let’s seize this opportunity and energize New Jersey’s future.
The views and opinions expressed in this editorial are those of the author and do not necessarily reflect the official policy or position of ROI-NJ.
