The U.S. Department of Commerce on Monday announced a new $25 million Notice of Funding Opportunity (NOFO) through the Economic Development Administration (EDA) to fund industry-led training programs that teach workers how to use artificial intelligence (AI) on the job.
The AI Upskill Accelerator Pilot Program will back partnerships between companies within the same sector across the country. The EDA will administer the program under its Economic Adjustment Assistance authority and use existing procedures under the Public Works and Economic Adjustment Assistance (PWEAA) NOFO framework.
Individual grant awards will fall between $1 million and $8 million, with the EDA planning to distribute the total funding across five to eight recipients. Project timelines must run between two and three years from start to finish.
The competition is limited to nonconstruction projects, with selected awardees required to launch their training components within 12 months of receiving funding. The EDA has indicated it will cover up to 60% of any awarded project’s total cost, with applicants responsible for sourcing the rest through matching funds or other contributions.
Applicants will need to qualify under the EDA’s Special Need criteria. Beyond that, the agency wants each project organized as an industry-led partnership, pulling together employers, training providers and other workforce groups under a single lead applicant.
Winning projects must roll out AI skills training, help participants reach completion and connect them to jobs. Grantees are also required to track program results. Funds can go toward system development or program design work, but every award must include a training implementation piece.
The EDA’s new pilot fits into the Trump administration’s wider AI Action Plan, which asks the Commerce Department to help working Americans build AI skills and to invest in regions where AI infrastructure is being built.
The funding announcement comes during a busy stretch for the EDA, an agency that tends to operate in the background among its federal economic development peers. Officials are working through a sweeping internal overhaul made possible by the Thomas Carper Reauthorization Act, which gave the agency fresh authority to rework how it operates.
In an April update, officials framed the initiative as a long-overdue effort to match the EDA’s day-to-day operations to current economic realities and to retire outdated processes that had been bogging down the grant pipeline. Much of the work over recent months has gone into turning that new authority into real-world changes, including building out new offices, standardizing how grants are managed across programs and reworking the agency’s regional structure so decisions move faster.
The $25 million is repurposed, not newly appropriated. The EDA freed up the funding by winding down three older programs the agency determined had run their course: the University Center program, Trade Adjustment Assistance for Firms and STEM Talent Partnership. Officials have described the move as part of a broader willingness to redirect dollars from legacy initiatives toward emerging priorities, with the AI pilot appearing as the first major program to come out of that shift.
The reshuffle also reaches beyond the budget. The EDA created a new Office of Disaster Recovery and Resilience to handle post-disaster grantmaking, launched an Office of Tribal Economic Development and consolidated grants administration under a formalized Office of Grants Management.
Officials proposed a handful of regulatory cleanups and have begun rolling out standardized toolkits targeted toward making the application and post-award process less cumbersome for grantees. Running the AI Upskill competition through the EDA’s existing PWEAA procedures, for example, rather than building a separate process from scratch, fits this new pattern.
The AI Upskill Accelerator joins a growing federal effort to embed AI fluency into the broader workforce pipeline. The U.S. Department of Labor rolled out its AI in Registered Apprenticeship Innovation Portal this spring and opened a national contracting opportunity to expand AI-focused apprenticeship programs across critical industries.
As the EDA’s first major program built around the AI Action Plan, results from the pilot are likely to shape how the agency approaches broader AI workforce investments going forward.
Photo by Colossus Cloud from Pixabay
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