The debate surrounding the impact of artificial intelligence (AI) on humanity continues, yet its economic potential is undeniable, especially for states that can attract AI-related businesses. AI is an energy-intensive industry that consumes a significant amount of electricity, water, computing resources, and land, positioning some states more favorably than others, even amid increasing public resistance. Tom Stringer from Stringer Site Selection in New York explains that ongoing AI projects require extensive resources, making it essential to identify locations with the necessary land and infrastructure to support this growth.
As part of CNBC's 20th annual America's Top States for Business rankings, which evaluates state infrastructure, several factors crucial for AI support were taken into account. This includes the availability of affordable and abundant electricity, sufficient water supply, and certification of sites ready for development. Ten states have emerged as key players in shaping the future landscape of AI.
Tennessee has been a front-runner in the AI field, launching the AI Tennessee initiative at the University of Tennessee in 2022 to ensure collaboration among government, industry, and academia. While electricity generation isn't its strong suit, the state's balance of reasonable electricity costs and an impressive water supply, managed by the Tennessee Valley Authority, bolsters its AI ambitions.
Pennsylvania is positioning itself as a competitive player in AI by facilitating a massive $20 billion investment from Amazon to build two large data centers. The state's substantial electric generation capacity and ample water resources support its ambition despite facing challenges due to the over-extraction of water.
South Carolina has significantly increased funding for its Palmetto Sites initiative, aiming to streamline site readiness for potential development projects. The state offers good water availability and competitive electricity prices, but its overall electric generation capacity leaves room for improvement.
Michigan is undergoing a significant transformation with the construction of a $16 billion data center for OpenAI and Oracle, although concerns about the state's stressed power grid have surfaced. The state plans to support this development with a substantial investment in site readiness.
New York is taking great strides to enhance its energy infrastructure with the newly established Champlain Hudson Power Express, bringing clean power from Canada to New York City. Despite high electricity costs, the state's grid reliability is commendable, ensuring minimal power outages for residents.
Arizona, despite grappling with rapid growth and water scarcity challenges, maintains a reliable energy grid with competitive prices. However, the state is actively seeking to bolster its energy generation capacity amid water infrastructure issues.
Indiana is ambitiously pursuing its goal to become the most AI-prepared economy, showcasing strong power supply metrics and a commitment to site readiness, indicating a promising future for AI investments.
Ohio excels in its infrastructure, recently drawing attention with plans for a massive data center development supported by a network of nuclear reactors and a significant natural gas facility, making it an attractive option for AI-related projects.
Meanwhile, Virginia boasts the most extensive site readiness program in the country, well-equipped to meet the power demands of data centers, despite facing backlash over the proliferation of such facilities.
These states, with their unique blends of resources and strategic initiatives, are navigating the complexities of AI development while aiming to capitalize on its vast economic potential.
