AI Can Be NJ’s Next Big Industry; Take the Risk

By Carlos Iván Merino and Jack Ramirez On Dec 30, 2025

New Jersey is rapidly establishing a reputation for itself in the artificial intelligence revolution, and an independent assessment now recognizes the state as being among a small group of leaders in AI readiness, with the policies, institutions and technical capacity necessary to move quickly as the technology matures. That success gives lawmakers a clear choice as they close out the lame-duck session: either build on New Jersey’s AI advantage with pro-innovation policy or undercut it by rushing through sweeping, restrictive rules that would chill investment and experimentation.

New Jersey’s emerging AI leadership is hard to ignore. The state created the NJ AI Hub to bring Princeton University, Microsoft, CoreWeave and public partners under one roof, with more than $72 million committed to invest in high-end computing, lab space and training programs. Microsoft then chose the Hub as one of only two places in the world to launch its new Discovery platform for AI-driven scientific research, positioning New Jersey at the center of the next wave of breakthroughs. The state is extending that push into the startup and innovation economy with a new $20 million NJ AI Hub Fund for startups, alongside the Next New Jersey Program – AI, which offers up to $500 million in tax credits to eligible AI businesses that invest in New Jersey.

Other states are moving in a very different direction. In places like California, lawmakers have spent the past year advancing broad, highly prescriptive AI proposals that aim to regulate the mechanics of rapidly evolving technologies and assign new liabilities based on hypothetical doomsday scenarios about what technology could do, rather than how it’s actually being used. Those bills may generate headlines, but they also create fundamental uncertainty for employers that are trying to use AI in practical ways today, and they risk pushing the next wave of investment and jobs to other states.

The Garden State does not need to copy that pattern. The state has already demonstrated that it can view AI as an economic opportunity while still taking its risks seriously. Instead of rushing to new regulations, we can pass policies that continue to strengthen our innovation economy. S4253 would establish an Artificial Intelligence Innovation Partnership, made up of independent nonprofit organizations that aim to advance emerging AI technology businesses and foster supportive, collaborative innovation ecosystems across New Jersey. By routing state support through these on-the-ground nonprofits, the bill would provide AI startups and employers with a dedicated ally to help them establish, sustain and scale in New Jersey.

How we approach AI regulations will matter most for the little tech companies and smaller employers that make up a significant portion of New Jersey’s economy. Large firms operating across multiple states can hire big legal teams and develop custom compliance systems. If New Jersey turns AI into a dense web of state-specific mandates and new liabilities, those smaller players will be the first to pull back or to decide that their next phase of growth should happen somewhere else.

None of this means New Jersey should ignore real risks. There is a role for targeted guardrails when AI is used to commit fraud, enable discrimination or cause other concrete harms to people. States are already on the front lines of enforcing those protections. The right move is to apply and, where needed, update existing consumer-protection and safety laws so they clearly cover AI-enabled conduct, rather than trying to pass sweeping AI laws that dictate how every model is built or trained. The better course is to lean into the model New Jersey has already started: investing in shared infrastructure, backing startups and using targeted partnerships.

New Jersey has done this before. From Bell Labs to the rise of the state’s biopharmaceutical and medical technology corridor, we have repeatedly turned scientific breakthroughs into new industries and middle-class careers. Artificial intelligence is the next chapter in that story. Policymakers will decide whether to deepen New Jersey’s emerging leadership in AI or to weaken it with heavy-handed regulation. They should choose to keep New Jersey’s long history of innovation alive by passing legislation that strengthens our AI ecosystem and encourages responsible adoption, instead of trying to freeze this technology in place.

Carlos Iván Merino is the American Innovators Network’s New Jersey Chapter president and Jack Ramirez is the economic policy research analyst at the New Jersey Business & Industry Association

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