The New Jersey Business & Industry Association (NJBIA) has expressed concerns over the state's ability to become a hub for artificial intelligence (AI) research and development. During a testimony to the Senate Legislative Oversight Committee, NJBIA Director of Economic Policy Research Kyle Sullender highlighted several key areas that need attention to foster AI innovation in New Jersey.
Sullender emphasized the importance of making New Jersey more competitive and attractive for students, innovators, and entrepreneurs. He stated, "If New Jersey wants to be a hub of artificial intelligence research and development then we also need to take on opportunities to attract students, faculty, entrepreneurs, and businesses to our state." He noted that in Fall 2022, New Jersey experienced a net loss of 28,000 students to out-of-state institutions.
The testimony also pointed out that NJBIA’s analyses consistently rank New Jersey as having an uncompetitive business climate. Sullender remarked, "If we are serious about becoming the home of AI innovation, then we have to become serious about improving the competitiveness and attractiveness of our business climate."
Workforce upskilling was another focal point in Sullender's testimony. He noted the increasing integration of AI tools in small and mid-sized businesses will necessitate additional training for employees. "These workers...will need to learn to interact with and utilize AI systems as part of their day-to-day work activities," he said.
Overregulation is seen as a potential barrier to innovation. In 2024 alone, numerous states introduced legislation concerning AI regulation. Sullender warned that such regulations could hinder research and market entry for new products if not managed properly. However, he mentioned ongoing efforts by major AI developers working with the federal government on guidelines for high-risk AI use cases.
Energy demands associated with AI technologies were also addressed. Sullender pointed out that data centers supporting AI are expected to consume significant power by 2030 due to increased utilization. He stressed the importance of ensuring adequate energy resources without unfairly burdening ratepayers: "AI has the capacity to transform our economy, but only if we have the energy necessary to power its operations."
Sullender's full testimony is available for those interested in further details.
