Applying for South Dakota's AI Funding: What the Process Actually Looks Like

A few weeks ago we shared the news that the South Dakota Department of Labor and Regulation is offering matching funds to help local businesses adopt AI. Since then, a lot of Mitchell business owners have asked the same follow-up question: okay, but how do I actually apply?

This week we got some straight answers. DLR ran a Workforce Knowledge Series webinar on July 9, and we sat in on it so you don't have to. Here's what we learned, on top of what the program page already tells you.

First, this is competitive funding, not a rebate. You apply first, then the state decides. Applications are due electronically by August 7. The Workforce Development Council reviews and takes action on August 25, and award decisions go out by September 1. If you're approved, DLR sets up a formal agreement with your business before the work begins. Applications are already coming in, so this isn't a program that's still warming up. It's live and it's competitive right now.

Second, keeping the money in South Dakota actually matters. We asked DLR directly on Wednesday's webinar whether using a South Dakota-based training provider factors into approval. The answer, straight from the state: yes, it's part of the scoring. They won't release the full rubric, since applications are already in and they don't want to hand later applicants an edge. But the headline is simple. If you're weighing a local provider against an out-of-state consultant flying in for the funding season, the state itself just told you which way the scale tips.

Third, the runway is longer than you'd think. Approved training doesn't have to be finished until June 30, 2027. This isn't a summer sprint, it's a plan-it-right project with almost a year to execute once you're approved.

Fourth, know your category.

• Category 1, Discovery ($5,000 cap): Cost-shared assessment work. Your invoice needs to document the process, meeting dates, the tools you're planning to implement, and your anticipated ROI and timeline. If you use Category 1 and want to move into implementation, you can apply for Category 2 by November 25 if funds remain, so discovery work can roll straight into the next step.
• Category 2, Training/Implementation ($20,000 cap): Itemized invoice, attendee list, dates, and completion certificates. This is the category most Mitchell businesses will land in if they're training staff on real tools for real workflows.
• Category 3, Awareness ($1,000 per employee, $10,000 cap): The training itself is free, pulled from a state-suggested provider list, and DLR pays your business for the employee time spent completing it, documented by completion certificates.

Fifth, there's no official published vendor list, but DLR will point you toward one internally. DLR doesn't publish a public directory of approved consultants for Categories 1 and 2, so you're free to choose your own provider, pay them, and submit documentation for reimbursement. But when we asked directly, DLR confirmed they do maintain an internal list they use to guide applicants who ask for a recommendation. If you're a business still weighing who to work with, it's worth asking DLR the same question when you're in contact with them about your application. And if you're a provider who wants to be part of that internal guidance, DLR can be reached directly at DLREmploymentPrograms@state.sd.us.

The bottom line: you've got 29 days to apply, the process rewards businesses that plan ahead and document well, and the state is telling you flat out that local matters. If you want to talk through what category fits your business, or you're not sure Discovery, Implementation, or Awareness is the right starting point, that's exactly the kind of conversation worth having before August 7, not after.

Everything starts with a 20-minute phone call.  https://Dakota-Intelligence.com