The Future is Now — How Arizona is Emerging as an AI Hub

Article originally posted on Phoenix Business Journal on November 26, 2024

The AI revolution has arrived, with AI technology fast becoming a part of everyday life.

Waymo automated vehicles, which have become ubiquitous in the Phoenix area, leverage AI to navigate city streets. Customer service chatbots and smart device voice assistant apps run on increasingly sophisticated AI systems.

These day-to-day applications represent just the tip of the iceberg for an industry that in 2023 attracted $189.2 billion in global investments. As demand for AI grows, industry experts predict Arizona will play a central role.

All the right pieces

Arizona’s promising outlook is driven by a robust, talented workforce and dynamic startup ecosystem, along with other key factors including top-ranked academic institutions and a supportive regulatory environment. Arizona is also a hotbed for industries at the heart of the AI boom, such as semiconductors and data centers.

“What is attractive about Arizona? The abundance of talent is number one,” said Andrew Bart, cofounder of AlgoFace, a rapidly growing AI facial analysis startup, which was a 2023 awardee of the Arizona Commerce Authority’s (ACA) Arizona Innovation Challenge. “Secondly, the startup ecosystem. Lastly, the resources of the ACA and the state of Arizona being behind a young but rapidly escalating venture capital environment focused on growing Arizona companies.”

Veteran entrepreneur Wendy Jameson agrees. The startup mentor and founder made a career pivot two years ago to focus on AI engagement strategies for business. Jameson now helps lead the AI for Entrepreneurs and Business Leaders program at Venture Café Phoenix. In just the past year, she’s seen a surge of AI interest in Arizona, particularly among business leaders.

“There is absolutely growing interest in Arizona around AI,” Jameson said.

Leading academic programs

Pioneering academic programs have given Arizona a head start in the AI race.

Arizona State University is consistently ranked as one of the top universities in the country for AI research, especially among faculty with master’s and doctorate degrees. ASU is currently ranked No. 3 in the U.S. for AI research, according to Computer Science rankings.

ASU’s School of Computing and Augmented Intelligence currently has 8,000 undergraduates and 4,000 graduate students, said Yezhou “YZ” Yang, associate professor and leading AI, computer vision and robotics researcher.

“This is the driving engine constantly producing talent into the AI and computer science fields,” Yang said. “It’s the powerhouse that helps the region adopt AI.”

In addition, ASU’s partnership with OpenAI, the AI research and deployment company behind ChatGPT, will introduce the advanced capabilities of ChatGPT Enterprise to the university, empowering faculty and staff to explore the potential of generative AI to enhance teaching, learning and discovery.

Likewise, University of Arizona professor Roberto Furfaro was recently awarded $4.5 million to develop AI-powered hypersonic guidance and navigation systems. The university is also the lead host for the Center of Quantum Networks, with core partners including Harvard University, the Massachusetts Institute of Technology and Yale University.

Community colleges also play an essential role in creating accessible pathways. In partnership with Intel and the ACA, the Maricopa Community Colleges District launched Arizona’s first AI associate degree (AAS) and certificate of completion (CCL) in AI and Machine Learning in 2020.

Pending approval from the Higher Learning Commission, Chandler-Gilbert Community College plans to launch a Bachelor of Science (BS) in Artificial Intelligence and Machine Learning in fall 2025.

“By embedding advanced AI training into our curriculum, Maricopa Community Colleges will equip the next generation of professionals with the experience needed to drive innovation and spur economic growth, creating both a national and global impact,” said Steven R. Gonzales, Ed.D., Maricopa County Community College District chancellor.

A digital revolution

AI relies on advanced microprocessors and acres of high-tech data campuses to run, which Arizona offers in abundance.

Arizona leads the nation in new semiconductor investment, with over $102 billion in capital investment and more than 16,000 direct industry jobs announced since 2020, according to the Arizona Commerce Authority. Industry leaders including Intel and TSMC are building the nation’s most advanced logic chip manufacturing facilities in the Phoenix area.

Much like semiconductors, cutting edge data centers — the critical digital infrastructure needed to store and process AI data — are sprouting up across the state. The Phoenix Business Journal reports that roughly 757 megawatts of data storage is under construction in the region with an additional 3,766 megawatts of capacity planned, the second-highest in the nation. Tech giants including Google, Apple, Meta, Microsoft, PayPal, American Express, GoDaddy and more all operate data centers in Arizona.

“AI is already proving to be a game-changer, transforming the landscape for business, technology, economic development and everything in between,” said Sandra Watson, president and CEO of the Arizona Commerce Authority. “We’re laser-focused on leveraging our unique assets and strengths to ensure Arizona remains at the forefront of this new technology.”