csg stack

CSG 50 State Scan Research Series

GREAT EXPECTATIONS: STATE AI POLICY

Section 6: Introducing the CSG State AI Competitiveness Indicators

In this section, we introduce the CSG State AI Competitiveness Indicators. These indicators complement existing rankings on AI policy (2025 Stanford AI Index, 2020 CSET AI Hub Data Brief, 2024 Rutgers Survey on AI) and build upon thoughtful research on AI readiness from CNBC and Brookings. The CSG State AI Competitiveness indicators provide a snapshot of how states are faring in terms of producing a regulatory and business environment conducive to AI adoption and implementation. The seven core measures are:

  • Indicator 1: Introduced legislation supporting AI development and innovation
  • Indicator 2: Number of Forbes Top 50 AI firms headquartered in each state
  • Indicator 3: Venture capital investment in startups by state
  • Indicator 4: Number of data centers located in each state
  • Indicator 5: Annual net electricity generation in each state
  • Indicator 6: Cloud infrastructure capability in each state
  • Indicator 7: Percentage of jobs requiring AI skills by state

Indicator 1: Introduced legislation supporting AI development and innovation.

How active are state legislators in shaping a political environment that supports the AI sector? We track the total number of bills introduced in state legislatures that promote the development and growth of AI technology in each state. As of October 2025, states have introduced 252 bills that support AI innovation and development. Hawaii and New York have been particularly active in the AI legislative arena, introducing 18 or more AI bills during the recent year. California and Georgia follow these states, with legislators in each jurisdiction championing about 15 AI innovation measures. Illinois is notable in the Midwest for establishing a political and legal setting that is favorable to the AI industry.

Indicator 2: Number of Forbes Top 50 AI firms headquartered in each state.

As part of our examination, we consider where existing top AI firms locate their operations. The idea is that having like-minded business neighbors within a state fosters a strong AI ecosystem for firms through network effects and a concentration of AI talent. For this indicator, it is worth clarifying that 42 out of the top 50 AI companies are headquartered in the United States. By this indicator, California is exceptional, hosting 33 Forbes Top 50 AI firms. As home to six leading AI companies, New York places second.

Indicator 3: Venture capital investment in startups by state.

We investigate venture capital investments in startups from 2020-2024 by state. This statistic suggests favorable conditions for private-sector AI development. Unsurprisingly, California is the big winner on this dimension with $537B recently invested in startups. Next, New York and Massachusetts enjoyed investments in the $100-138B range from 2020-2024. Then, along with Washington, these data highlight the growing prominence of Texas, Florida, Colorado, and Illinois as fertile grounds for private sector capital.

Indicator 4: Number of data centers located in each state.

Data centers are crucial for running servers, generating the necessary levels of computing power, and providing data storage needed for AI systems to operate successfully. As the use of AI systems by Americans increases over time, there will be a greater demand for the computing power offered by data centers. Home to more than 600 data centers, Virginia is the mecca for data centers in the U.S. Moreover, Texas and California each have more than 300 data centers. State leaders and private firms should also keep their eyes on Illinois, Ohio, Georgia, and Arizona as emerging hubs for data center infrastructure. Regionally, New York boasts the most data centers (142) among CSG East states.

Indicator 5: Annual net electricity generation in each state.

AI infrastructure such as data centers and cloud computing centers requires stable and significant levels of energy. Accordingly, we examined data on terawatt-hours (TWh) of electricity that is generated within states. A terawatt-hour is a unit of energy equal to one trillion watt-hours, commonly used to measure large amounts of electricity. Texas is the leader in net electric output, producing more than 580 TWh of electricity each year. Next, Florida, Pennsylvania, and California fuel residential and commercial electric needs in the 210-268 TWh range. After this group, Illinois, Ohio, Alabama, and Georgia turn out between 142-189 TWh of electricity annually. Each of these states create substantial amounts of electricity, some of which could power the growth of the AI sector.

Indicator 6: Cloud infrastructure capability in each state.

This indicator rates cloud infrastructure covering public clouds, private clouds, hybrid clouds, and cloud hosting services. Cloud computing provides data storage, computational power, and scalability needed for AI systems (e.g., model training and data processing). The leader in cloud capability is California with 40 cloud servers. The next tier includes a cohort of states that have between 22-26 cloud servers within their borders (Texas, Virginia, Florida, and Illinois). In the Eastern region, New Yorkers enjoy the computing infrastructure benefits provided by seventeen cloud servers.

Indicator 7: Percentage of jobs requiring AI skills per state.

This indicator is used to identify attractive states where the AI talent pool might gravitate towards and grow within the United States. Collected from a comprehensive job market dataset from the University of Maryland, each state is given an “AI Job Intensity” percentage value that is calculated by the following numbers for the course of one year: Percentage of AI Jobs/All Jobs. This intensity measure provides important insights on talent saturation hotspots. The data suggests that along with familiar hubs in the D.C. area, California, Washington, Massachusetts, and New York, firms might also draw from nearby states like New Jersey, Connecticut, and Delaware for AI talent.