Ann Arbor’s Position in the AI Cluster Race
December 4, 2025
Ross DeVol
Chairman Emeritus and Distinguished Fellow
As the fourth installment in Heartland Forward’s evaluation of the positioning of heartland metropolitan areas in the AI race, this issue evaluates Ann Arbor, Michigan. Previous editions evaluate Chicago, Austin and Dallas’s positioning across academia, workforce, research and innovation. The Ann Arbor metropolitan area is anchored by one of the world’s leading research universities, the University of Michigan (UM), renowned for its strength in science, technology, engineering and mathematics (STEM). The region’s AI ecosystem combines cutting-edge academic research (including MIDAS—the Michigan Institute for Data & AI in Society and the Michigan AI lab) with deep industry expertise across robotics, mobility, and the health and biomedical fields. This ecosystem is fueled by a robust talent pipeline—from world-class AI and engineering graduates to community college programs at Washtenaw Community College and other inclusive, cross-disciplinary AI training initiatives. Ann Arbor SPARK provides acceleration services for AI startups.
The AI ecosystem is further supported by strong connections to corporations such as Ford, Intel and May Mobility. [AC1] Low business costs, a supportive business climate, and affordable housing form a unique AI environment which positions Ann Arbor as the fourth highest performing among heartland metros, behind Chicago, Austin and Dallas, but ahead of much larger Houston, due to the talent, innovation and adoption criteria.[i]
Firms find the Ann Arbor metro area attractive for a number of reasons, but the research and talent created at UM are critical. The University of Michigan invests more on research than any other public university in the nation. In 2024, federal agencies allocated more than $1 billion in research funding with more than half coming from the National Institutes of Health.[ii]
Talent
Based upon 2024 data from the Census Bureau, 60% of Ann Arbor adults age 25 years or older hold at least a bachelor’s degree, the highest percentage of any metro area with a population exceeding 300,000. Many of these residents have degrees in computer science, engineering and mathematics (CSEM). There are 41,600 graduates with CSEM degrees in the metro area, accounting for 11% of the local population, exceeding Austin’s share of 8.5%. Ann Arbor excels in PhDs in CSEM areas, with 2,100 enrolled in PhD or post-doctorates in STEM programs in the area overall, more than seven times the per capita figure of Austin.
Over 2,000 individuals graduate annually from the University of Michigan with degrees in computer science, data science, robotics, electrical engineering and AI—which directly contributes to the local workforce of global tech employers as well as startups. The UM College of Engineering offers a Bachelor of Science (B.S.) degree in computer science with a concentration in artificial intelligence and its applications in robotics. Students are encouraged to pursue AI-focused senior design projects in conjunction with the Michigan AI Lab. Additionally, UM offers a B.S. in Data Science with a heavy focus on AI applications.
Further, the school offers an M.S. in Computer Science and Engineering with a core concentration in AI, and master’s degrees are additionally offered in robotics with emphasis on AI-driven control and AI ethics. UM has one of the top Ph.D. programs in Computer Science and Engineering in the nation, with core AI areas of machine learning, deep learning, natural language processing, computer vision and trustworthy AI.[iii] Other cross-disciplinary AI & data programs, such as the Master of Applied Data Science and the Master of Business Analytics (Ross School of Business) are available. UM has a Master of Health Information Analytics (School of Information & Public Health) that provides training for AI in health care, clinical decision support, and electronic health records analytics. The program works closely with Michigan Medicine through the joint E-HAIL (E-Health & Artificial Intelligence) initiative to integrate AI into health research and clinical systems in Ann Arbor.
Beyond the University of Michigan, the broader metro area is home to Eastern Michigan University (EMU) and Washtenaw Community College, both of which are integrating AI into curricula. EMU offers several STEM degree programs at the undergraduate and graduate levels. Currently, more emphasis is placed upon AI integration into learning, and as such, EMU offers several AI professional training and certification programs as well. Foundations of AI for the Enterprise, offered through EMU’s professional training arm, covers AI history, evolution and practical business applications.[iv] Also offered are applied classes on using ChatGPT & Copilot and creating AI apps with Flask and OpenAI. The Washtenaw Community College offers noncredit classes on an introduction to generative AI, making AI education more accessible across the metro area. Additional entities, such as MIDAS and Ann Arbor SPARK provide hands-on AI training and bootcamps to help residents and those already in the workforce learn practical AI applications and skills.
Innovation
Outside of coursework and formal classroom instruction, the University of Michigan leads Ann Arbor’s innovative research initiatives. MIDAS is UM’s university-wide hub advancing AI and data science research. Its Propelling Original Data Science (PODS) grants allow UM faculty to perform groundbreaking interdisciplinary research on data science and AI, which enables research teams to establish new collaborations, spawn creative ideas and secure external funding to expand their work.[v] Michigan AI is the AI Laboratory and affiliated faculty in the UM College of Engineering—a key research pillar of the college, which is additionally responsible for innovative AI study. Another research institute at UM is the Michigan Institute for Computational Discovery and Engineering, where AI applications pertaining to robotic decision-making is researched, which has potential applications for the use of AI beyond LLMs. Lastly, the university is additionally home to a 32-acre autonomous vehicle test city, called Mcity, which integrates AI perception and control systems, furthering the development of autonomous vehicles.
In December of 2024, an exciting new research initiative was announced between the University of Michigan and the Los Alamos National Laboratory (LANL) to build a new high-performance computing (HPC) and AI research facility based in Washtenaw County. This $1.25 billion project will combine LANL’s national security research with UM’s academic expertise to advance fields like AI, materials science and energy. The new center will feature two cores: one for national security research and another for academic and public research, with construction set to begin in 2027 and operations starting in 2031.[vi]
When it comes to published research, Ann Arbor is once again a leader. The Ann Arbor metro area published 102 AI-focused research papers at top AI conferences last year, exceeding the academic output of Dallas, further underscoring UM’s placement as a top 10 AI research university according to US News.[vii] This is countered, however, with the fact that Ann Arbor is home to fewer AI firms, and as such, the 76 AI-related patents secured in the Ann Arbor area is below that of the three leading heartland metros. However, Ann Arbor receives a significant amount of federal R&D dollars, exceeding the contracts secured by Chicago and matching those secured by Dallas.
Adoption
While Ann Arbor doesn’t host major tech headquarters, it boasts more than three times the national average share of employment in scientific research and development services which is 80% more concentrated in architectural, engineering and related fields. Toyota’s North American research and development headquarters—focused on electric vehicles—anchors one part of this ecosystem. Another is FORVIA, a sustainable mobility technology leader based in Ann Arbor that develops AI solutions to make mobility safer, more affordable, customizable and sustainable.[viii] Torc has also opened an engineering center in Ann Arbor to tap into the region’s autonomous and mobility talent.
Across AI adoption metrics—including firm AI use, data readiness, cloud readiness and the share of jobs exposed to generative AI—Ann Arbor performs well compared to Chicago, Austin and Dallas.
The city’s startups help bring this strength to life. Voxel51 is an innovator in the visual software space, allowing AI builders to unlock data insights to maximize model performance with heavy applications in automotive and robotics but supporting a range of other sectors. Spun out of UM’s technology transfer office, the company raised $30M in Series B venture funding in 2024, led by Bessemer Venture Partners. Refraction AI, which applies robotics and autonomous logistics to solve last-mile delivery challenges. Genomenon, backed most recently by Beringea U.S. and Spring Mountain Capital, uses AI to assess the clinical relevance of genetic findings, enabling more accurate diagnoses and treatment decisions for cancer and other diseases.[ix]
In total, 43 Ann Arbor startups are creating AI-driven products, and 26 of them have secured VC funding—a striking success rate that reflects the quality and depth of the region’s innovation ecosystem.
[i] Muro, M., and Methkupally, S. (2025). Mapping the AI Economy: Which Regions are Ready for the Next Technological Leap? Brookings Metro, https://www.brookings.edu/articles/mapping-the-ai-economy-which-regions-are-ready-for-the-next-technology-leap/
[ii]Nied, Katie (June, 2025), Ann Arbor, MI, Precis U.S. Metro, Moody’s Analytics
[iv]Foundations of AI – Professional Programs & Training | Eastern Michigan University
[v]https://midas.umich.edu/research/?utm_source=chatgpt.com
[vi]https://research.umich.edu/research-at-michigan/lanl/?utm_source=chatgpt.com