I Interviewed New Jersey Governor Phil Murphy about AI - Ep. 52 with Governor Phil Murphy

[00:00] I'd be interested to hear your take on what the proper role for government is as it relates to AI. And we could break that down at the federal, state, and local level. How do you think about it? Leaving states to be the regulatory nexus for AI is a mistake. I think this is something where you need a national framework, if not an international framework. How do you deliver government services with AI? First of all, we're training all of our 61,000 employees in generative AI. [00:30] Secondly, hall centers need an appointment at Motor Vehicles Commission, unemployment insurance benefit question, any sort of general question about a particular government service, hugely valuable. And as opposed to replacing people. [00:48] At least so far, and this is my hope forever and for always, that it's allowing folks to upskill their daily lives into areas that they have always wanted to. [00:58] to spend more of their time but have been unable to. What do you look to for inspiration when you think about how to successfully stimulate innovation in a state at a government level? When you wake up in the morning, look in the mirror and be honest with yourself. Who are you? Who are you not? [01:15] What can you be? What can you not be? [01:18] In our case, the happy reality, [01:21] is we were not trying to become an innovation [01:24] state or economy. That is who we are. But if you're talking about AI, pharmaceutical, bio, life sciences, tech, telecom, green economy, film, television, digital, fintech, sports betting, not just to handle where we're the world leader, but the guts of the industry.

[01:42] On all of that, that's in our sweet spot. [01:58] Governor Murphy, welcome to the show. Hey, good to be here, Dan. Thanks for having me. [02:03] I'm so excited to have you. You are the first governor we've ever had. So thank you for taking the time to talk to me today about AI. [02:13] you [02:13] I wanted to start... [02:15] And just ask you just personally, how has it impacted your day to day, either in your sort of work, political life or in your personal life? Has it impacted your day to day in any any particular way? [02:27] Me personally, honestly, no. [02:29] But in terms of the actual, I refer to it as a realm, not a technology, but [02:36] In any of its evidence, it is not. [02:39] Bun. [02:40] That's a very narrow answer relative to how much time I spend [02:45] on artificial intelligence. [02:47] So we'll get into this, I'm sure, but it's a big economic development objective of ours. I spent a lot of time on that. [02:55] It's a big weapon that we're using in government. [02:59] to better interact with our residents, [03:03] the whole ethics associated with it, [03:07] The... [03:09] the community out there more broadly, which is growing significantly in New Jersey. So in a broader sense,

[03:17] It's a big part of my day. [03:19] But as a very narrow, has AI changed technology? [03:22] your [03:23] life in a sense, no, not yet. That makes sense. Well, maybe another framing question that I'd be interested to hear your take on is what the proper role for government is as it relates to AI. And we could break that down at the federal, state, and local level. How do you think about it? [03:44] It's complicated, and I'm not sure I've got the answer, and I would venture to say nobody has the answer. [03:51] The European Union made a big deal last year that they put together their big [03:57] regulatory paradigm and [04:00] That looks stale already. [04:02] and potentially stifling to the development of the industry. [04:06] On the other hand, you can't abide by a Wild West. [04:11] And that is... [04:14] as much if not a bigger concern. I do think [04:18] Dan, I'm going to go out on a limb and say... [04:22] leaving states [04:24] to be the regulatory system. [04:26] Nexus for AI is a mistake. [04:29] I think this is something where you need a national... [04:33] framework. [04:34] if not an international framework, honestly. [04:37] but at a minimum, a national framework. [04:40] And it's... [04:42] almost shocking to me, [04:45] Um, [04:46] that [04:46] when you look across the spectrum of the

[04:50] of the talent in this industry from the folks who, [04:53] who worry about the Wild West, [04:56] from the folks who could care less about the Wild West and everybody in between, [05:01] I don't think anybody has figured that out yet. [05:04] Okay. And I'm curious if you think that it should be done at a national level, like what, what governs that? What makes you think that it needs to be national rather than state? [05:14] Yes, when I say national, I should say this. I apologize for not being more... [05:17] clear, largely as a regulatory matter. [05:20] who've already become a patchwork quilt [05:23] country as it relates to rights and freedoms, whether it's reproductive or gun safety or [05:29] Voting rights are [05:30] You name it. [05:32] this is [05:34] This would be yet another... [05:37] all-encompassing realm it already is to a certain extent but it will ultimately touch [05:42] Every aspect of our life. [05:45] And to think that [05:46] There's one... [05:47] set of rules in New Jersey and is a different one in Pennsylvania. [05:51] For something as pervasive as, [05:53] And as central as this, I just can't. [05:56] I can't get my mind around that that's a good idea. No, I think you're totally right. I mean, as someone who operates an AI business, I can't imagine having to... There are enough different statewide rules for sales tax. I can't imagine adding AI regulations on top of that. That would be weird. It's one thing how you buy booze or where you buy booze. This is in a different realm. It's got to be at least national. Okay.

[06:26] of different ways that governments interact with new technologies. So what about in terms of non-regulatory? I know there's a lot of New Jersey initiatives you're doing. I'm [06:37] that relate to AI. So tell me more about that. Yeah. So there are. And I'll tell you a story [06:46] that is... [06:48] sort of at the base of this new jersey sells very well you're going to wonder why i'm starting here trust me hopefully it'll make sense [06:56] New Jersey sells very well around the world. [07:00] So we do a lot of economic missions. [07:03] With great success. Trenton makes the world takes. [07:07] Exactly, exactly. We call ourselves, you ready for this? The world's state. [07:13] You heard it here. [07:16] We literally just announced... [07:19] a big economic mission to several Gulf countries. [07:23] for next month. We just literally announced that this morning. [07:27] As part of that, we treat people. [07:30] California [07:31] essentially as a nation state. It would be the fifth or sixth largest economy in the world if it were a country. It has a huge amount of similarities. It's a [07:41] to our economy. [07:43] So we go out there once or twice a year. [07:46] Usually in the south, [07:49] for film and television would become a huge player in film and TV globally. [07:54] And in the north, it's [07:55] almost exclusively for technology and more recently for generative AI. And we had a sort of seminal dinner together.

[08:06] At this point... [08:07] I just... [08:08] two plus, two and a half years ago, in the Bay Area. [08:11] And it was like the room I'm in now. There were probably a dozen or 15 seats. There were a few of us, including my wife and a couple of our colleagues and 10 or 12 folks in the AI stratosphere. [08:27] And I asked them, hey, what's [08:31] The venture capital numbers, at least at that point, into AI, California, and almost all of it in the Bay Area, and again, you've forgotten more about this than I'll know, was like $20 billion over a period of time. New York City was second at a billion. [08:47] So it's clear that the ground zero [08:51] for the talent at least in AI, [08:53] was in the Bay Area, and I asked them, [08:56] Hey, why here? [08:58] And why not in a place like New Jersey? [09:01] And it turns out the answer is talent. [09:05] Period. [09:06] They had all sorts of other frustrations with him. [09:09] the way business was conducted, regulations, taxes, whatever it might be, cost, [09:13] of living [09:14] But they said the reason... [09:16] There in the Bay Area is talent. [09:19] And when I look in the mirror, [09:21] And look at New Jersey, I see a state, the first word that comes to mind is talent. [09:27] particularly in the STEM world, [09:28] particularly in the innovation economy. [09:31] So we started out literally, that was the trigger, [09:34] We started to say, listen, we could be a major player in this space. And when I say player, I mean economic development, grow companies here.

[09:44] in research, in regulatory matters, in ethics. [09:49] in delivering government services more efficiently, [09:53] to our residents and all of the above. And on that last one, unlike regulation, [10:01] where I think we can have a... I'm not suggesting we can't contribute to the regulatory discussion, [10:06] I'm more referring when I said nationally to the framework. [10:10] on government services, [10:12] I think we can lead the nation in terms of more efficient, [10:16] smarter delivery of government service. On that point, [10:20] I'm a huge bull and we're up to our eyeballs doing just that as we speak. [10:24] Can you give me a concrete example of what that looks like? How do you deliver government services with AI? [10:30] First of all, we're training people. [10:33] all of our 61,000 employees in generative AI, [10:38] Secondly, the low-hanging fruit won't surprise you. [10:42] Hall centers need an appointment at Motor Vehicles Commission. [10:47] Unemployment insurance benefit question? [10:50] Any sort of general question about... [10:54] a particular government service [10:57] hugely valuable, [11:00] And as opposed to replacing people, [11:03] At least so far, and this is my hope, [11:06] forever and for always. [11:08] that it's allowing folks to upskill [11:11] their daily lives into areas that they have always wanted to.

[11:15] to spend more of their time but have been unable to yeah [11:19] It's still early, but the returns are extremely promising. When you say training all state employees in generative AI, what does that look like? What kind of skills are you training them in? [11:32] It's our version of the co-pilot, essentially. [11:35] And how do you use that? AI Copilot. So it's sort of like a ChatGBT, but built by Microsoft. [11:40] Exactly, and ours is... [11:43] unique to our particular operation, but it's that sort of a [11:48] If you're using the word in a different context than it normally gets used, I view it as kind of an accelerant. [11:55] It allows you to jump higher, faster, stronger. [11:59] than you otherwise would have been. [12:00] And help me understand what that looks like. I mean, um, I was at the, uh, you know, I'm in New York. I grew up in New Jersey, which we talked about, uh, uh, before, before the show. So New Jersey, um, and I'm in New York now. And, um, [12:15] you call it the MVC, the Motor Vehicle Commission, but in New York, it's the DMV. And I went to the DMV and like, [12:23] It's really where fun goes to die, unfortunately. And there's a lot of time that's spent. I went and filled out, you wait, you get a number, then you fill out a form, and then you go to the counter [12:38] And then they say, [12:40] you forgot one of your documents. You have to come back. And that's a waste of their time. It's a waste of my time. And it's just like the whole thing kind of sucks for everyone. What does an AI enabled MVC look like?

[12:52] Well, I have to say I want to be fair in terms of credit or not credit to AI per se. [12:59] We had an epiphany five years ago during the throes of the pandemic. [13:05] The two areas that are most retail in our government are the [13:11] Motor Vehicles Commission number one, [13:13] And number two is our Department of Labor and Workforce Development, in particular around unemployment benefits. And you can imagine, [13:21] in the throes of the pandemic, [13:24] both frustration with motor vehicles appointments, [13:27] and a historic tidal wave [13:30] of unemployment insurance benefit claims, [13:33] were coming at us morning, noon, and night. And we had no choice. [13:37] but to reorient our entire community, [13:41] Operations. [13:42] So even putting AI aside, I'll go now to motor vehicles. In fact, literally just had a... [13:49] a zoom meeting with the head of the commission today and her team [13:53] This is overwhelmingly an online experience these days. [13:58] It's overwhelmingly, if you need to go in in person, it's by appointment as opposed to you're standing in a... [14:05] two-hour line that was born, by the way, out of the fact that we couldn't, as a public health matter, allow two-hour lines inside of these buildings when you're still dealing with a [14:16] a pandemic. [14:17] The AI piece, I think, if you were to say, where is it, helped [14:21] It has prevented...

[14:23] The, um... [14:25] It's preempted is a better word. I need to show two electric utility bills or two proof of... [14:33] my permanent home address. [14:36] That's all... [14:37] preempted and taken out of the equation. [14:40] I think call centers are a better example. [14:43] They're getting calls are getting answered much more quickly. [14:47] You're able to use large language models to [14:51] basically come up with 99% of the answers of whatever a resident might want. [14:57] have in any particular area. [15:00] And I think we've only scratched the surface. I want to say that as well. We're not, I'm not an expert by any means. [15:06] And I think we're at most... [15:08] in the first couple of pitches in the top half of the first inning yeah i think that's a really interesting question which is um [15:16] How is it possible or what have you learned about, you know, integrating technology like this over a vast workforce and, you know, supporting other people in the state to do it as a non-expert? And who are you bringing around the table? How do you do that effectively to figure out? [15:34] decisions to make and support to give. [15:38] So there's that great phrase from a Supreme Court justice whose name I always forget. [15:42] When he's asked to define pornography, he says, I can't define it, but I know it when I see it. Count me in the... [15:49] extreme edge of the "I know it when I see it" as it relates to generative AI,

[15:56] We have, mercifully for the residents of New Jersey, we have some serious issues. [16:00] people who are [16:02] at the helm here. So, [16:05] One woman in particular, Beth Novak, who is... [16:08] was advisor to President Barack Obama, Chancellor Angela Merkel, who we know from my time as ambassador there, Prime Minister David Cameron. She's a [16:19] a technology savant. And she is, she was our chief of innovation. She's become our senior AI strategist as of about, [16:29] a year or so ago and and just use her as one example [16:34] uh i i'm i'm [16:36] I'm giving broad directional advice. [16:39] Um, [16:40] input [16:41] In particular, we haven't talked about the economic development aspect of this, which is where I spend most of my time, but there are other areas. [16:51] Folks who are [16:53] Literally experts are far more expert than I that are actually driving the specific decisions. What's the training look like? Where do we apply this? Et cetera. [17:02] Well, let's talk about the economic development aspect. If you're spending a lot of time there, just describe to us what your economic development plan is for AI in New Jersey. [17:13] So that's probably the most... [17:15] profound takeaway from that dinner I mentioned, that there's no reason why New Jersey can't have [17:22] a significant presence [17:24] with both the talent and the company's

[17:27] on the East Coast. Maybe with New York City, by the way, we do a lot [17:31] constructively with New York City, and I think there's a good amount of symbiosis. [17:36] on this one as well. And one more wrinkle. [17:39] which is not specific to AI. [17:42] New Jersey's economy that's innovation heavy, STEM heavy, [17:47] but it became... [17:50] Prior to our time here, it became big corporate heavy. We love the big corporates. That's not the point. And we've got a lot of them and we're proud to, [17:59] that we've got them and we're getting more regularly. [18:03] But we had lost our way on the startup culture. [18:07] The venture capital money was going elsewhere. The talent was going elsewhere. [18:11] So again, as a general strategy, we came up with a formula. [18:15] to build [18:17] what we call strategic innovation centers. [18:21] We've done 10 of them. [18:22] I'll give you one non-AI example. FinTech, financial technology, [18:27] New Jersey's had the middle and back office of Wall Street for decades. It's a natural for us. [18:33] So we got a higher ed player, Stevens Institute of Technology, a big corporate prudential financial headquartered in Newark. [18:40] Our economic development authority putting significant money to work. [18:44] and an accelerator. [18:46] In this case, one of the biggest in the world plug and play from the Bay Area. [18:50] and that's the Strategic Innovation Center. And lots of things will come out of that including research, [18:56] and job opportunities

[18:58] And... [18:59] All sorts of things. [19:01] including... [19:02] several dozen startups a year. [19:05] We've now done 10 of these. [19:07] So we decided... [19:09] that [19:10] Generative AI was absolutely right for one of those strategic investment centers. [19:17] And as we speak, we're going to pray. [19:18] We announced over a year ago, we just added to the team a few weeks ago, [19:23] We have something called the New Jersey AI Hub. [19:27] It is a venture with Princeton University. [19:30] and most recently with Microsoft, [19:33] and core weave. [19:35] which is growing like a weed, [19:37] a hyperscaler, New Jersey headquartered, founded, ported bread in Jersey. [19:43] as our partners to be determined what the accelerator role looks like on that one. [19:48] That's still evolving. [19:51] And that to us will be a great nexus for research and, [19:56] for students to participate [19:58] for the big corporates to exchange ideas, but I think most importantly, [20:04] to accelerate, ignite, I think is a better word, [20:07] the startup community in and around the [20:10] the network created by those four partners. You're already seeing... [20:14] evidence of that core weed is the best example. [20:18] We'll have a fund associated with that. [20:21] Those are in some of these strategic innovation centers, not in all of them. [20:26] But that to me is what I'm most excited about. And guess what?

[20:31] for the latest period for data that's available, [20:35] on venture capital, which is the first half of 2024. [20:39] In terms of destination of VC, [20:42] New Jersey's back in the top three American states behind only California. [20:47] and New York. So that's [20:49] That's a place that we want to be. We feel like it's our right, given our innovation history. Edison, Einstein, Bell Labs, Edison. [20:57] You name it, that's our rightful place. And I'm happy to say we're reclaiming that place. [21:03] I love it. Well, I just want to understand more about what these innovation hubs are and how they work, because I am sort of curious how states... [21:11] stimulate innovation. So it seems like you get together a big company, a university, maybe a couple other players. And are you establishing a campus or a building? What does it actually mean to have an innovation hub? I think in most cases, if not all, [21:31] There's a physical location. [21:33] There is a financial commitment from the state. [21:38] through our Economic Development Authority. [21:42] There's now over $250 million of private capital committed across these 10 countries. [21:48] entities [21:50] Committed to do what? Like fun startups? Yeah. To everything from... [21:57] help fund the building fit out to all the ways I mentioned in the AI case and some of the others as well,

[22:05] funds that would invest in startups. Some of them have open lab space. [22:11] Bell Labs themselves, they... [22:16] are still in jersey they're operated by nokia [22:19] they decided that they're [22:23] They had two campuses. In the old days, they only have one today. [22:28] um [22:29] They looked around the world, literally, [22:32] to try to figure out where they should locate, [22:35] And they chose, I'm happy to say, New Jersey to stay here. [22:38] but to move to New Brunswick. [22:40] into something called the helix. [22:42] and they themselves will be pardoned. [22:45] of a, um, [22:47] of one of these strategic innovation centers. We just announced it a couple of weeks ago. [22:52] So it, not to be all over the place, but it does depend on the specific, [22:57] the particular center in question. [22:59] Okay, got it. I, I, yeah, I'm, I'm definitely mostly asking about the AI hub, but, um, but yeah, in general, I think that's also interesting. Do you have any models that you look at when you, when, [23:09] If you're in the business, as my late mother would say, of your number of the company, you keep. [23:14] New Jersey and the Economic Development Authority keeping company with Princeton University [23:20] which you know well if you're a former hometown, [23:23] at Microsoft and CoreWeave, [23:25] We're keeping damn good company. I do know Princeton well, but I have a little beef with the university because I took a computer science class there when I was in high school and I got a C plus. And so my position sit on the board. So I will take it upon myself to.

[23:44] to uh to investigate your transcript thank you it's good to have friends in high places [23:52] um they are incredible that that institution is i didn't go there it's incredible [23:59] The leadership team is incredible. I've never been around more impressive talent in my life. It really is. It's an amazing place. If you work in tech, you know how crucial responsive customer support is. [24:11] but scaling quality interactions can be really hard if you have limited resources. But what if you could clone your best support agent instantly without adding headcount? That's JotForm AI Agents, your 24/7 support powerhouse across text, WhatsApp, Messenger, and even voice calls. It's fluent in 19 languages. [24:28] Forget stitching together clunky chatbots or watching a request pile up overnight. Dotform AI Agents integrates directly into your workflow, automating follow-ups, helping customers with form completion, and delivering responses that actually sound human. Whether you're running a lean dev team or managing customer success at scale, [24:44] JotForm AI agents handle support inquiries so your team can focus on shipping. [24:48] Are you ready for support that scales with you? Visit jotform.ai slash danshipper for an exclusive 50% discount on all annual plans. [24:56] That's jotform.ai slash dan shipper. In the AI era, the human customer is still king. Create your AI agent today with Jotform and turn every customer interaction into an opportunity to delight with instant, thoughtful responses. [25:09] But I am curious when you think about, okay, so these innovation hubs, is that a model that you saw work somewhere else? Or where do you look to? Or what do you look to for inspiration when you think about states or governments or localities or federal governments, any kind of model for how you're doing?

[25:26] to successfully [25:28] stimulate innovation in a state at a government level. [25:33] So I think a couple of things. One is... [25:35] We always say, when you wake up in the morning, look in the mirror and be honest with yourself. [25:41] Who are you? Who are you not? [25:43] What can you be? What can you not be? [25:47] In our case, the happy reality [25:50] is we were not trying to become an innovation company. [25:53] state or economy. [25:54] That is who we are. [25:56] I'm going to die trying to make cars and trucks. [25:59] again in New Jersey. I fear I will die trying and my time left. [26:03] But if you're talking about AI, [26:06] pharmaceutical, bio, life sciences, tech, telecom, green economy, film, television, digital, fintech, [26:14] Um [26:15] Sports betting, not just to handle where we're the world leader, but the guts of the industry. [26:21] On all of that, that is... [26:23] That's it, our sweet spot. [26:25] So we're trying to recapture something. [26:28] As opposed to a state going from... [26:31] scratch or from ground zero and trying to become that, that's hard to do. [26:35] In our case, we had... [26:38] For several decades, and by the way, I'm not making a political case here because it was both sides of the aisle, we lost our way on the innovation economy. [26:46] So I was committed to refinding our way. [26:49] And it was pretty obvious. You never bat a thousand. [26:53] But we had held on [26:55] to most of the big companies and we still attract big companies. That wasn't our issue.

[27:00] Although we don't take any of that for granted, for sure. [27:03] Our issue was we, as I mentioned earlier, we had lost our... [27:08] our way in the startup community. [27:10] So we have a bunch of weapons to work on that. [27:14] The Strategic Innovation Center is the best example. [27:18] And I give Tim Sullivan, who runs our economic development, [27:22] authority a lot of the credit for actually formulating what that looks like but we've got other weapons we could talk about as well last point do we look to other models [27:33] of success. [27:35] and rip pages out of their playbook. We do it morning, noon, and night. [27:39] So I look at [27:42] Harvard, MIT in Boston, where I was born and grew up. [27:47] I worked at the Bay Area. [27:49] We did an economic mission in November to Cambridge, England. [27:53] to understand what their magic was. [27:56] We did this in Berlin. We did it in Seoul, South Korea. [28:03] As I mentioned, we go to California and treat California like a nation state. [28:07] We're constantly sponging [28:10] for good ideas to jumpstart, further develop the innovation economy. [28:15] I think that's really interesting. It makes a lot of sense. Play to your strengths. New Jersey, obviously, there's a lot going on in New Jersey. You got Princeton University. That's a big one. I have some New Jersey lore having grown up there. Movie industry started there before it went to California. I think Bloomberg is headquartered there.

[28:36] or at least they have a gigantic, gigantic office in New Jersey. [28:41] They're not headquartered here, but they're here. We've got a big media presence here. [28:45] CNBC is a big... [28:49] presence, the National Basketball Association, the NFL, the [28:53] Um, [28:55] Comcast, there's a whole lot of folks, increasingly the [28:58] film and television business would become a... [29:01] globally significant player. So Netflix is building a 300-acre campus [29:08] There's a big camp. Lionsgate is building a big one in the south ward of Newark. There's a [29:13] Another one that's being built in Bayonne, New Jersey. [29:16] That's an area where we are [29:20] We're now globally competitive and intend to remain so. [29:24] And when you say New Jersey sort of lost its way, in particular on the startup front, [29:30] Is that like a... [29:31] like a marketing problem? Like there's a lot of great business stuff happening in New Jersey and technology and innovation stuff happening in New Jersey, but people just don't really think of it that way. Or is it, did something happen that caused people to be less likely to want to start a company in New Jersey? So as we sit here today, I'll repeat, we're back. So we're now, [29:52] We're poised to have many hundreds more startups a year [29:56] than we would have eight years ago. [29:57] And as I mentioned, the venture capital numbers are bearing that out. [30:01] CoreWeave is the best example out there. [30:04] but happily not the only one.

[30:06] Why did it happen in the past? I don't think there was one moment or one reason. [30:10] I think the transfer of hands, [30:13] and the somewhat downsizing of Bell Labs probably helped. [30:17] We still export too many products. [30:20] of our high school students to universities [30:23] We have the number one public education system in America, and one of our main exports are [30:28] 12th graders going to college. That was part of it. [30:32] I think we lost a little of the coolness factor. [30:36] You know, the live, work, play. [30:38] that you saw the Boston area, Cambridge, [30:44] Brooklyn where you are [30:46] Manhattan to a certain extent, Bay Area. [30:49] that they were able to corner the coolness market. [30:53] We'll pull that back. [30:56] Um, [30:57] If you like sports, entertainment, [30:59] live, work, play, walkable communities. [31:05] Um, [31:06] rapid transit, public transportation, [31:10] You know, we put a lot, we legalize weed, [31:12] We're expanding liquor licenses. [31:17] So probably 20 different levers were pulling. [31:22] uh not any one of them that while the strategic innovation centers would be the one big one i would point to we have a very turbocharged angel investment [31:33] tax credit, [31:34] Um, [31:35] We've got a hugely diverse state and diverse innovation ecosystem. So we're playing to our diversity. A lot of other states are playing away from diversity. We're playing into that.

[31:48] with success. Again, we're not perfect [31:52] But we have lost our way. No one moment, no one reason. [31:56] But we've thrown a lot against the wall and in the aggregate, at least, it feels like it's working. [32:01] Yeah. One of the things that makes me think about is startup is a very general term and so is AI. It's a very general term. You can apply it to a lot of different things. And I think when people think about, okay, I want to be a talent hub that competes on the level of New York or San Francisco or whatever for AI. [32:21] Those places have really well-established networks that are very hard to [32:27] disintermediate or change. [32:29] Um, but, uh, but each, each place tends to have, like the reason New York is, I think, somewhat competitive sometimes with SF is that it has a specific set of things that it's really good at. Like if you want to do fintech stuff or you want to do a direct to consumer commerce, New York's actually like a pretty good option. And there's lots of AI, you know, there's lots of AI stuff to do in both of those realms. And I'm kind of curious when you think about leaning [32:59] slice things a little bit thinner and think about the kinds of startups or the kinds of companies that tend to have success in New Jersey. What does that look like? [33:07] Yeah. First of all, I think generically when I pitched the state [33:11] The two words that I start with are talent and location. [33:15] And secondly, I also say to folks, every state has a bumper sticker.

[33:19] Ours is the number one state in America to raise a family. [33:23] So we're particularly good [33:26] This is more generic than you want, but I'll get to that in a second. We're particularly good... [33:31] at [33:33] A young couple. [33:35] They've just met the girl or guy of their dreams. [33:38] They've just gotten married. They're just thinking about having a kid or they just had a kid. [33:43] Between that age, whatever that is, [33:45] and junior, the last kid graduating from high school, [33:49] That's, we dominate in that space. [33:52] A lot of what we do is to make sure we continue dominating that space. And by the way, [33:57] keep or attract more young people [34:01] particularly to stay after college or stay for college, [34:04] And we do a lot of things like property tax relief to keep you when you're retired on a fixed income and you want to stay close to your kids and grandkids. [34:13] In terms of slicing it more thinly, [34:16] If you put a gun to my head, the area where I think you'll see the biggest... [34:21] impact. And I think we will be a [34:24] a leader in this space, and that is bio life science pharmaceuticals. [34:29] That's our natural, one of our natural wheelhouses. [34:33] Um, [34:34] As you know, Princeton is in the central part of the state where a lot of that industry resides. Merck, Bristol-Myers, Johnson & Johnson. I grew up right next to Bristol-Myers campus. You know exactly where they are. There's still got many thousands in that campus.

[34:49] if you said specifically, the analogy to your New York City [34:56] direct to consumer, I think will be bio life sciences, pharmaceutical. Is there anything AI related that you're doing in that area specifically? [35:05] Well, it wouldn't be me. [35:06] it would be at these companies, but we hope this hub will support that. [35:11] But I think drug discovery [35:14] is going to be the... [35:15] the mother load here [35:17] The pharmaceutical industry is at a hard time [35:20] explaining [35:22] Why? [35:23] costs are what they are. And by the way, they only contribute to a slice of that cost. [35:28] Let's put aside PBMs and insurance companies and hospital systems and providers. [35:34] Um, [35:35] But they also have had a hard time [35:38] And it's understandable with the man on the street, if you will, [35:41] explaining why [35:43] You know, [35:44] only 5% of their research dollars [35:47] actually leads to a [35:50] successful FDA-approved drug discovery. [35:53] Thank you. [35:54] And I think this will be a huge weapon. [35:57] in that space in particular. We're not doing that. We hope that by creating the right environment, which is usually talent, [36:06] research, [36:07] It's not an accident that [36:10] The Boston-Cambridge... [36:13] Area. [36:14] has had the success they've had. It's overwhelmingly MIT and Harvard and the talent and the research

[36:20] We think we've got as strong a horse... [36:23] in that race as anybody with Princeton University, [36:27] We start in a good place. It's the number one public education system in America, highest concentration of scientists, [36:33] and research professionals per square mile in the world. [36:38] That's a good place to start. And I think drug discovery is one of many, but I think will be a huge... [36:46] example, we look back five or 10 years from now. We spent a lot of time in this interview talking about interesting and exciting use cases for AI. And that's because that's just, I just, [36:56] I'm excited about it, so that's what I'm interested in. But I think also a lot of people, it feels scary. [37:02] There's a lot of worries about how it affects jobs. There's a lot of worries about ethical AI use. What are you thinking about that and what do you think the government's role is in... [37:16] I know you said regulation has to happen on a federal level, but I assume you think there's some state role to ensure that there's ethical use or to think about how it affects jobs, all that kind of stuff. How do you think about it? [37:27] Yeah, I mean, just like any... [37:29] There are all sorts of federal laws, but there are state laws, too, in a lot of the world. So this would be no exception. But I think you have to have a national framework. [37:38] Listen, we think a lot about it. [37:40] I'll give you two sort of specific one, which is very relevant. [37:46] to us in New Jersey and state government, another one which is [37:49] Probably more relevant to us, you and me, as a

[37:52] American citizens, peace-loving people, in my case, a former ambassador, [37:57] In the first case, [37:59] You want to hope and do everything you can [38:02] to extend that trend of upskilling [38:06] as opposed to job replacement. [38:08] In other words, you do more than, [38:11] with the team you have on the field, [38:14] as opposed to doing what you're doing now or even more with a smaller team. [38:20] I don't want that. [38:22] I want... [38:23] plus or minus the team we have on the field, doing really cool stuff and allowing AI to basically dominate the day in and day out [38:35] More. [38:37] mundane prosaic elements of anybody's job. So, [38:41] Making sure that happens and allaying people's fears is, [38:45] is one area where there's a lot of anxiety and we're doing everything we can to address that. [38:52] And at the other end of the spectrum, [38:54] The Wild West in the global world. [38:56] uh context. [38:58] Frankly, the Wild West lately in the American context, but we can leave that. No politics for this. [39:05] But, you know, the race to do you fill in the blank. [39:11] And clearly the Chinese have put an enormous amount of focus on this. [39:16] as have we [39:18] And we're just going to have to [39:21] I think we're going to be grappling with what that looks like in terms of global architecture.

[39:27] for a long time. I don't think there's any answer to that. [39:30] particularly given the tensions that we have faced, [39:34] right now around the world, which are going up and not down. [39:39] Yeah. I would love to get into the international stuff in a second, but just sort of back to the more local or state stuff. Part of it seems to be... [39:50] even just a sort of communication challenge. How do you explain what this stuff is and how do you explain how to use it so that people get curious about it and start [40:00] learning about it, uh, instead of, you know, I think, I think, uh, [40:03] Uh, familiarity breeds comfort and unfamiliarity breeds fear. How do you think about doing that communication on a state level? If you do it all. [40:13] Yeah, I mean, we're in violent agreement on that. It's part of the reason why we wanted to train everybody. [40:19] It was not just the benefits you get from the training. [40:22] but it's the getting people comfortable or more comfortable [40:27] with the whole notion. [40:29] And I think I'm knocking on wood. I think that is working with surveyed our people. [40:33] We've surveyed the private sector. [40:36] We take, you know, we're a fact-based operation. We're not making a lot of gut... [40:40] DECISIONS. [40:41] Um, [40:42] And I think the more people... [40:44] Use it. [40:46] And see, in fact, in their own personal professional lives that they're able to. I hate that the word upskill sounds like I just graduated from a McKinsey training class. I think it does nothing against McKinsey, but I think it does.

[41:02] The reality. So there's stuff up here that I've been wanting to do that's more strategic, if you will. [41:09] But I'm not able to get to it. And there's stuff down here that say more tactical, for lack of a better word. [41:15] that I've been wired in, [41:17] that I now have help on that I didn't have before. [41:21] And I think the longer that runway is that people can see that's in fact how it works, [41:27] the more comfortable, less anxious folks will be. [41:31] Yeah, that's definitely been my experience running a small team with writers and programmers and all that kind of stuff. One of the things we talk about a lot is this idea that we're moving from a knowledge economy to an allocation economy. [41:45] where in a knowledge economy, you're compensated based on what you know. And in an allocation economy, you're compensated based on how well you can allocate the resources of intelligence. And in particular, in an allocation economy, the skills that you need to master are skills that are already around. They're just not that widely distributed and they are the skills of managers. So if you're a human manager today, a lot of the things you're doing day to day are things that [42:15] the next five to 10 years are going to have to do, just you're a model manager instead of a human manager. [42:20] And that seems to be... [42:23] When people start to get that, it feels incredibly empowering because, yeah, you're right. You can kind of like move out of the sort of hamster wheel of I got to do all these repetitive tasks and into I'm doing much more creative work than I ever could have before.

[42:39] That makes complete sense. And I'll say this. [42:43] somewhat not tongue-in-cheek but i'm going to circle back i know where our time is almost up to where we started [42:48] I'm not your AI expert. [42:51] But as a senior manager, in my case, in the private sector, [42:55] And as a diplomat, [42:57] Now as governor, [42:59] allocating my time, the time of others, resources, [43:04] Arguably, it's the biggest part of my job. [43:07] So you may well see folks like myself who you would never mistake for you. [43:12] in terms of your [43:14] experience and expertise, [43:17] You may see this come around a little bit here in terms of [43:21] Um, [43:22] That's sort of almost CEO... [43:24] model, how do we move things around, how do we optimize [43:28] It's an interesting, it's a very interesting point. And it feels like that's where we're headed. Definitely. I think so. And I know we only have a little, little bit of time left, but I just wanted to get your, your quick take on, on internationally. Um, [43:40] Yeah, obviously you mentioned geopolitical tensions with China. What do you think is the right... [43:45] AI strategy internationally, it seems like not something that we can just [43:50] go out unilaterally alone. I think that's right. Although you have to have, certainly as a national defense matter, you've got to have an America first element here. [44:00] I mentioned earlier, I think the view is... [44:04] has been determined that the Europeans [44:07] overcorrected in terms of [44:09] their framework around the industry.

[44:12] And I think that will have profound... [44:14] implications, particularly if you're going to have some fracture fracturing rather of [44:19] in the transatlantic alliance it looks like the moment we are which i think is a huge [44:24] mistake, but... [44:25] If that's true, I'm not sure. [44:27] American technology will less likely be driving European innovation than it is today. They're going to have to figure out a way to... [44:36] to drive that [44:38] far more within their own four walls. [44:41] As it relates to China, I'll leave Russia, North Korea, and Iran aside who are [44:46] three of the other members of the quartet [44:49] and focus on China because China has the most emphasis on [44:54] On, uh, [44:55] on this space. [44:57] arguably our biggest economic competitor, [45:02] arguably our biggest geopolitical competitor, [45:05] I think you've got to, this is going to sound easy and it's incredibly complicated. [45:10] You're going to have to have a relationship where... [45:13] We're talking. [45:14] where there is some [45:16] channels, [45:18] of communication. [45:19] where we're going to be very clear about our respective interests, [45:23] what we care most deeply about, they'll be clear about what they want. [45:27] care most deeply about? [45:28] but also at the same time find areas [45:32] of common ground and common cause. [45:34] And I would hope this would be [45:37] Listen, we're going to have our own national defense interests. I get that. [45:40] But beyond that,

[45:42] I would hope this would be on the list of areas. [45:45] where we could have some amount of transparency and openness. [45:48] intellectual property [45:50] theft [45:52] I'm sad to say, is a constant concern. [45:55] with them as a counterpart. [45:59] So you've got to find some way where you're [46:02] Maybe deep seek was the first step [46:05] in some sort of transformation that they're, if they're going to be an open book, uh, [46:11] You know, we could be an open book and that's maybe the first step of a long journey. [46:16] We shall see. We shall see indeed. Well, I think that's our time. Governor Murphy, thank you so much for joining us. [46:23] Dan, thank you so much for having me. You are welcome back in Jersey anytime. [46:29] I'll be visiting my mom soon, so maybe I'll drop by. [46:32] Give her a hug for me. [47:02] that will leave you on the edge of your seat. [47:05] craving for more. It's not just a show. It's a journey into the future with Dan Shipper as the captain of the spaceship.

[47:12] So do yourself a favor, hit like, smash subscribe, and strap in for the ride of your life. [47:18] And now, without any further ado, let me just say, Dan, I'm absolutely hopelessly in love with you.