Tennessee leans on public-private-sector collaboration — and maybe $50 million — to ‘throw a rope’ around AI

Tennessee state officials said Wednesday that expanding the use and impact of artificial intelligence technologies will require strong collaboration between the public and private sectors, even as the state has already begun successfully to wrangle the rapidly evolving field.

The comments, made Wednesday by attendees of the AI Tennessee Summit in Nashville, follow weeks of work by the legislature on the state’s 2027 budget proposal, which carves out millions for enabling the use of AI in state government. Gov. Bill Lee on Tuesday unveiled his final, amended budget proposal, which features $50 million for AI infrastructure in Tennessee, a state government that has already integrated a number of generative AI tools, like ChatGPT Enterprise, into employee workflows.

Jim Bryson, commissioner of the state’s Department of Finance and Administration, said at the summit that if Lee’s proposal goes forward, it will move some AI projects from proof‑of‑concept to enterprise-wide deployments.

“We spent the last year in a little bit of catch up, kind of said, OK, how do we kind of throw a rope around it and wrestle it to the ground? And that’s that’s been a little bit of what we’re doing. And so now it’s like, OK, we’ve kind of — I wouldn’t say we wrestled it to the ground, but I would say that we’ve got a much better handle on it. And so now, where do we go from here?” Bryson said.

Along with the work of the state’s Artificial Intelligence Advisory Council, which Lee established in 2024 (and which Bryson co-chairs with state Chief Information Officer Kristin Darby), the state is also retooling its attitude towards that deployment and its impact on state employees, Bryson said.

“Our attitude going forward in the state is that AI should support, not replace, our people. That’s where we want to be,” he continued. “But that presents a lot of challenges, especially as AI moves forward faster and faster and we get better and better uses for it. It will replace processes and it will replace tasks — but what we have been challenged with is, how do we upskill and create higher-value, meaning higher-paid jobs for those workers when some of their tasks can be done by AI or other technology.”

Some of that funding will help to build an “AI data management layer,” Bryson said, to help the state better use the large, state-owned, previously siloed data troves. Other funding in the proposal would fund initiatives to strengthen AI governance, safety and accountability, including bettering the software and hardware needed to protect citizens’ data and manage AI risks.

Bryson said the proposal also includes reserve funds for “the unknown,” a recognition that AI changes faster than the state’s annual budget cycle.

“AI doesn’t happen once a year — AI changes constantly,” he said. “There’s so much that we don’t know that’s going to happen over the next couple of years. So the governor was farsighted enough to say, OK, we’re going to put some money in there for potential projects that we’re going to come across down the road.”

He said the state’s willingness to spend on AI is a illustration of its long‑term commitment to the technology and to being a national leader. Tennessee has already led on a number of state-level laws regulating the tech, like 2024’s Elvis Act, which made the state the first to protect songwriters, performers and music industry professionals from generative AI models.

But state AI laws are under threat. Last summer, the Trump administration indicated its support of a moratorium on states enforcing their own AI laws, preferring instead a federal regulatory framework that wouldn’t stifle “innovation.” While efforts from federal lawmakers to codify a moratorium into law failed, the efforts didn’t end there — in December, Trump signed an executive order that attempted to ban state AI laws, leading to widespread clashing between states and private industry. The Trump administration last week delivered to Congress a six-item framework of AI legislative policies it wanted passed, including the preemption of state AI laws.

And in a pre-recorded video statement aired during Wednesday’s Summit, Sen. Marsha Blackburn, the Republican from Tennessee who led the charge last summer to defeat the moratorium, said she was working on the federal legal framework for regulating AI after being being tapped by Trump to lead the effort. In December, Blackburn unveiled the Trump America AI Act, which primarily aims to boost U.S. leadership in AI by reducing regulations, increasing federal support for AI development and prioritizing national security uses.

“We are looking forward to leading that discussion,” she said, “making certain that the states retain their right to enforce laws until such time as we pass federally preemptive legislation to put in place the protections and the life touch regulation that will make certain that the and the state of Tennessee is the leader in AI.”