Executive Summary
Pennsylvania is one of the most dynamic SLG technology markets in the country right now, and three forces define it. First, the Shapiro Administration ran the nation's first state-government generative-AI pilot (ChatGPT Enterprise with OpenAI and Carnegie Mellon) and in April 2026 expanded AI to 3,000+ employees across 35 agencies under a new Generative AI Governing Board — agencies are actively operationalizing AI and need governed infrastructure. Second, a roughly $90B wave of AI data-center investment is landing in the Commonwealth, anchored by Amazon's $20B commitment and the $10B Homer City gas-powered campus, making PA national-scale AI infrastructure. Third, the central technology buy runs through the Department of General Services' COSTARS cooperative program and statewide contracts, with the Office of Administration (OA-OIT) setting enterprise IT and security policy. Budget timing is improving but still not on-cycle: the 2025–26 budget landed 135 days late ($50.1B, signed Nov 12, 2025); the 2026–27 budget was signed July 12, 2026 — 12 days after the July 1 fiscal-year start — at $50.8B, roughly $2.5B below Shapiro's $53.3B proposal, with no new taxes and no Rainy Day Fund draw. It adds $10M for Commonwealth cybersecurity infrastructure, but a broader push to tie the data-center tax exemption to Shapiro's GRID standards stalled, leaving only a modest energy/water reporting mandate. Shapiro then acted on his own: Executive Order 2026-05 (Aug. 18, 2026) ties state data-center permits to the GRID standards and local approval and removes data centers from Fast Track permitting.
- AI-infrastructure / 'AI factory' demand tied to the $90B+ PA data-center boom (PowerEdge, networking, services) plus university research computing.
- Governed AI for state agencies expanding from 3,000 toward enterprise scale — private/on-prem options for sensitive workloads under the new AI Governing Board.
- NIST-aligned endpoint and security refresh as SB 377 pushes NIST standards into IT procurement.
- Client, endpoint, and lifecycle modernization across ~80,000 executive-branch employees and the CODE PA digital-services push.
Dell Action Plan
- Lead the AI-infrastructure conversation: tie Dell ISG / AI Factory offerings to PA's ~$90B data-center wave and to Penn State / PASSHE research-computing buyers.
- Position governed, private/on-prem AI for sensitive agency workloads as the gen-AI program scales past 3,000 users under the new Governing Board.
- Lead endpoint and security refresh with NIST-aligned lifecycle controls to align with SB 377's procurement direction.
- Validate Dell's COSTARS and DGS statewide-contract coverage and reseller registration are current for the agencies and locals you're targeting.
- The FY2026-27 budget is now enacted ($50.8B, signed July 12) — engage agencies off final appropriations, and watch for a September return to data-center GRID legislation that could reset AI-infrastructure incentive economics.
Budget & Fiscal
Pennsylvania budgets annually on a July 1 fiscal year. The 2025–26 General Fund budget of $50.1B was signed November 12, 2025 — 135 days late. The 2026–27 General Fund budget of $50.8B was signed July 12, 2026 — a marked improvement in timing (12 days into the new fiscal year vs. 135 days late the prior cycle) — with no new taxes and no Rainy Day Fund draw. There is no single 'state IT budget' line; technology spend is distributed across agencies, the Office of Administration's enterprise IT services, and named digital and broadband initiatives.
- The 2025–26 budget was enacted 135 days late; the 2026–27 budget enacted July 12, 2026 improved on that but was still 12 days past the July 1 start — confirm appropriation status before forecasting against agency timelines.
- BEAD is federal infrastructure money administered by the PA Broadband Development Authority, not General Fund IT spend — different buyers and rules.
- Shapiro's original FY2026-27 proposal (per NASBO, Feb 2026) sought $53.3B general fund and a $4.58B rainy-day draw; the enacted $50.8B budget came in $2.5B lower and drew nothing from reserves, leaving roughly $8B in reserve as of July 1, 2027.
Initiatives & Policy
Statewide Generative AI Expansion4
ScalingPennsylvania ran the first state-government gen-AI pilot (ChatGPT Enterprise with OpenAI and Carnegie Mellon's Block Center); pilot employees saved ~95 minutes a day. In April 2026 the Shapiro Administration expanded AI to 3,000+ employees across 35 agencies, with 6,500 more in training, under a new Generative AI Governing Board. A clear opening to lead with governed, private/on-prem AI for sensitive workloads as adoption scales.
AI Data-Center & Energy Buildout8
Restricted by executive orderA ~$90B investment wave is landing in PA: Amazon's $20B commitment (incl. a campus beside the Susquehanna nuclear plant), the $10B Homer City gas-powered AI campus on a retired coal site, and CoreWeave's $6B Lancaster build. PA's natural-gas and nuclear power plus its RGGI exit are pitched as energy advantages. But Executive Order 2026-05 (Aug. 18, 2026) now ties state data-center permits to Shapiro's GRID standards and local approval and removes data centers from Fast Track permitting. Still the largest source of Dell ISG / AI-infrastructure demand in the state, now slower and more conditional.
BEAD Broadband Deployment7
Awards in progressPA's $1.16B BEAD program (via the PA Broadband Development Authority) closed its final application round in August 2025; the board provisionally approved $793.4M in grants pending NTIA sign-off. Aimed at universal high-speed access by decade's end. Mostly a fiber/ISP motion, but it signals sustained network and edge investment statewide.
SB 377 — NIST Standards in IT Procurement9
Stalled in HouseSB 377 (Phillips-Hill) passed the Senate 49-0 in June 2025, requiring procured endpoint devices and related services to meet NIST cybersecurity guidelines or industry best practices. It was laid on the table in the House in October 2025 and has not advanced since — not enacted as of June 2026. Still signals legislative intent toward a NIST baseline in Commonwealth IT contracting, favorable to vendors who can document NIST-aligned endpoint security and lifecycle controls.
Procurement & Competition
The Department of General Services (DGS) runs central procurement, including the COSTARS cooperative purchasing program ('Cooperative Sourcing to Achieve Reductions in Spend'), which lets registered local governments, school districts, and state-affiliated entities buy from DGS-established contracts — including IT hardware and software — without running their own RFP. The Office of Administration (OA-OIT) sets enterprise IT strategy, security policy, and shared services for the ~80,000 executive-branch employees under the Governor's jurisdiction.
| Vehicle / gate | What it means for Dell |
|---|---|
| COSTARS Cooperative Purchasing | Primary cooperative vehicle via DGS for local gov, schools, and state-affiliated entities. Covers IT hardware/software. Confirm Dell agreements and reseller registration are current. |
| DGS Statewide Contracts | Pre-competed Commonwealth contracts for IT commodities and services used by executive agencies. |
| OA-OIT Enterprise IT Services | Shared infrastructure, security policy, and IT operations for executive-branch agencies — sets standards a winning offer must meet. |
| Key buying entity | Role |
|---|---|
| Office of Administration (OA-OIT) | Enterprise IT strategy, security, and shared services; home of the CIO and gen-AI program. |
| Department of General Services (DGS) | Central procurement and COSTARS cooperative — the statewide buying motion. |
| Department of Human Services / large agencies | Among the largest agency IT and data-modernization spenders. |
| Penn State, PASSHE & state-related universities | Large, largely independent research-computing and AI-infrastructure buyers. |
Pennsylvania is a contract-driven market where COSTARS and DGS statewide contracts shape access and incumbents hold positions across compute, client, and networking. Differentiation tends to come from AI-infrastructure capability tied to the data-center wave, NIST-aligned security (SB 377), and governed AI for agencies rather than price alone.
Power Structure
| Decision-maker | Why they matter |
|---|---|
| Josh Shapiro4 Governor · Commonwealth of Pennsylvania | Champions the gen-AI program and the AI data-center/energy agenda; drove the RGGI exit as an energy play. |
| Bry Pardoe5 Deputy Secretary for IT / Commonwealth CIO · Office of Administration (OA-OIT) | Named CIO Oct 2025 (made permanent same month); former CODE PA executive director. Confirmed on the OA leadership page as of June 2026 with the title 'Deputy Secretary for Information Technology - Chief Information Officer.' Owns enterprise IT and cybersecurity direction; CTO Greg Fiedler (named March 2026) leads the Enterprise Technology Services Office under her. Her former CODE PA role is now held by Sara Hall (named Feb 2026). |
| Andy Ritter15 Commonwealth CISO · Office of Administration (OA-OIT) | Named permanent State CISO Feb 4, 2026 after serving interim since Oct 2025; prior deputy CISO from Jan 2024. Part of a Feb 2026 wave converting four acting IT roles to permanent (also exec deputy CIO Jim Sipe and CODE PA director Sara Hall). Owns Commonwealth cybersecurity policy — the buyer for NIST-aligned endpoint/security positioning. |
| Neil Weaver4 Secretary of Administration · Office of Administration | Leads OA (HR, IT, records) for ~80,000 employees; confirmed as Secretary on the OA leadership page as of June 2026; public face of the AI governance push. |
| PA Broadband Development Authority (PBDA) Broadband program owner · Commonwealth of Pennsylvania | Administers the $1.16B BEAD program and grant awards. |
News & Signals
Sources
- Technical.ly — New Pennsylvania budget invests millions in biotech, workforce and tech (CODE PA)
- City & State PA — 5 things to know about Pennsylvania's 2025-26 state budget
- PA Office of Administration — About IT (OA-OIT)
- PA Office of Administration — Shapiro Admin expands safe, responsible AI
- City & State PA — Bry Pardoe is Pennsylvania's acting CIO following IT staff changes
- CNBC — Amazon to spend $20 billion on data centers in Pennsylvania
- PA Broadband Development Authority — ~$800M in BEAD grants provisionally approved
- Data Center Frontier — Pennsylvania's $90 Billion AI infrastructure investment wave
- PA General Assembly — Senate Bill 377 (2025-2026, NIST IT procurement)
- Construction Review Online — Former Homer City plant to become $10B AI data center campus
- DGS — COSTARS Cooperative Purchasing
- StateScoop — Pennsylvania expanded generative AI to 3,000 employees
- NASBO — Summaries of FY2027 Proposed Budgets (June 2026)
- City & State PA — 2026-27 Pennsylvania state budget tracker
- GovTech — Pennsylvania Names Andy Ritter as Permanent State CISO
- Spotlight PA — Shapiro releases full PA data center incentive proposal (GRID)
- Commonwealth of Pennsylvania — Governor Shapiro Signs Bipartisan 2026-27 Budget (July 12, 2026)
- Spotlight PA — PA added just one regulation for data centers in budget (July 2026)
- Commonwealth of Pennsylvania — Governor Shapiro Signs Executive Order on Data Center Development in PA
- StateScoop — Data-center tracker website shows status of builds in Pennsylvania
- PA Office of Administration — Governor Shapiro Secures New Funding to Continue Modernizing, Securing Online Services
- BCTV — Public Utility Commission Moves to Address Data Center Impacts on Electric Reliability and Consumer Costs
- PennLive — Pennsylvania grid reliability at risk as data center boom drives demand
- Capital & Main — Pennsylvania's Amazon Data Center Boom Is Fueled by a Lucrative Tax Break