Growth, Jobs, and Energy
The data center industry is a massive and rapidly growing sector, valued at over $95 billion in 2023 in the U.S. alone. Over the past decade, the industry has seen explosive growth, driven by the increasing demand for cloud services, Artificial Intelligence (AI), and machine learning technologies. Looking ahead, the industry is projected to continue its upward trajectory, with forecasts predicting a 10.7% annual growth rate through 2030.
New Jersey, known for its vibrant, high tech economy and strategic location, has embarked on an ambitious journey to become a leading hub for AI. Governor Phil Murphy has been at the forefront of bringing the AI sector to New Jersey. In July, 2024, Murphy signed the Next New Jersey Program to attract AI investments into the state.
“AI has already started to revolutionize our everyday lives, and New Jersey is capitalizing on this moment to ensure we establish ourselves as a frontrunner in generative AI innovation. The creation of this program will support the growth of AI-related businesses, which could lead to scientific breakthroughs and lifesaving discoveries right in our backyard. AI will be a transformative industry that will change lives and grow our economy and New Jersey is ready to take the lead.”
Governor Phil Murphy
The Murphy Administration has also partnered with Princeton University to develop an AI Hub and established an AI Task Force to study AI’s societal impacts.
The effort is already yielding results. Roseland-based CoreWeave, an AI cloud platform, last fall chose the Northeast Science & Technology Center (NEST) in Kenilworth (the former Merck campus) as the home of their next data center. CoreWeave will invest over $1.2 billion turning the 280,000 square foot former Merck lab and manufacturing building into a state-of-the-art data center, their first in New Jersey.
“From life-saving healthcare breakthroughs to traffic jams, artificial intelligence will touch every aspect of our daily lives,”
Senator Raj Mukherji
The next generation economy will be built upon AI, and bringing AI and data centers into New Jersey will ensure that New Jersey’s economy continues to evolve and grow. The CoreWeave project alone is expected to generate hundreds of jobs, ranging from construction and engineering to IT and cybersecurity. These high-paying positions not only provide financial stability for New Jersey residents but also contribute to the state’s overall economic growth.
Moreover, the presence of advanced data centers fosters a robust ecosystem of ancillary industries, including renewable energy, real estate, and telecommunications. This ripple effect amplifies the economic benefits, making New Jersey an attractive destination for both businesses and talent.
Catching Up
While New Jersey’s efforts are commendable, it faces stiff competition from other states that are also vying to become AI data center hubs. Virginia, for instance, is already home to approximately 70% of the world’s internet traffic. With significant investments from companies like Google, Virginia continues to expand its data center footprint, supported by a strong infrastructure and a tech-savvy workforce.
Georgia is another contender, with Amazon Web Services (AWS) planning an $11 billion expansion in the state. Georgia’s strategic location and supportive business climate make it a preferred choice for tech giants looking to scale their operations.
Texas, known for its favorable business environment and vast land area, is attracting investments from Microsoft and Google. The state’s low energy costs and business-friendly policies are key factors driving this growth.
Despite these challenges, New Jersey’s strategic advantages, including its proximity to major financial hubs, robust transportation network, and highly educated workforce, provide a competitive edge.
More Energy
The energy impact of data centers is significant, with U.S. data centers consuming more than 4% of the country’s total electricity in 2023. This figure is expected to rise to 9% by 2030 due to the increasing demand for AI and cloud computing services.
In recognition of how important energy is to data centers, the CoreWeave announcement included statements from PSE&G. Ralph LaRoss, Chair, President and CEO of PSE&G’s parent company PSEG said, “This project is a good example of the work that Governor Murphy and the New Jersey Economic Development Authority are doing to foster a new wave of economic development for our state. We are excited to welcome and partner with Onyx and CoreWeave on this project.”
Just across the river in Pennsylvania, Microsoft plans to reopen Three Mile Island in order to power its data center there. If New Jersey is to become a major player in the new AI economy, reliable and affordable energy will be a necessary part of the formula.
Conclusion
New Jersey’s concerted efforts to attract AI data centers are yielding promising early results. With significant investments, job creation, and a supportive business environment, the state is well-positioned to become a leading player in the tech industry. While competition from states like Virginia, Georgia, and Texas is fierce, New Jersey must combine its unique strengths and sound energy policy to become a major player in the AI economy.
Sources
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“CoreWeave to take 280K SF space at the NEST in Kenilworth; invest $1.2 billion at facility,” ROI NJ, https://www.roi-nj.com/2024/10/24/tech/coreweave-to-take-280k-sf-space-at-the-nest-in-kenilworth-invest-1-2-billion-at-facility/
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“Amazon to invest $11 billion in GA as it adds facilities in Butts, Douglas counties for AI expansion”, WSB Atlanta, https://www.msn.com/en-us/money/news/amazon-to-invest-11-billion-in-ga-as-it-adds-facilities-in-butts-douglas-counties-for-ai-expansion/ar-AA1x8kKH
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“Google adds $1B investment to data centers in Texas”, AXIOS, https://www.axios.com/local/dallas/2024/08/15/google-dallas-data-centers?form=MG0AV3
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“Three Mile Island nuclear plant will reopen to power Microsoft data centers”, NPR, https://www.npr.org/2024/09/20/nx-s1-5120581/three-mile-island-nuclear-power-plant-microsoft-ai
