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

I interviewed the Governor of New Jersey Phil Murphy on AI & I. We spent an hour talking about his vision for AI in government, economic development, and the regulatory challenges ahead. His approach is refreshingly pragmatic: Spark real innovation at scale. Governor Murphy is laying the groundwork through an AI hub that pools the strengths of the government, academia (Princeton University), legacy tech (Microsoft), and next-gen players (CoreWeave). Creating a place for the brightest minds to live and work. He’s making the Garden State irresistible for the best talent through walkable communities, legal recreational cannabis, and an angel investment tax credit. AI that augments teams, instead of replacing them. The Governor sees AI as an “accelerant” that enables teams to do more with the same number of employees. He’s walking the talk by training 61,000 NJ state employees in AI to automate busy work and free them to focus on strategic tasks. An integrated regulatory framework for AI. He believes that a technology as pervasive as AI should be regulated at a national level because the state-by-state approach could stifle innovation. Governor Phil Murphy is the first governor I’ve ever had on the show and I was honored he took the time to come on. I was also especially excited to do this because I grew up in New Jersey! This is a must watch for anyone interested in the intersection of AI and policy. If you found this episode interesting, please like, subscribe, comment, and share! Want even more? Sign up for Every to unlock our ultimate guide to prompting ChatGPT here: https://every.ck.page/ultimate-guide-to-prompting-chatgpt. It’s usually only for paying subscribers, but you can get it here for free. To hear more from Dan Shipper: Subscribe to Every: https://every.to/subscribe Follow him on X: https://twitter.com/danshipper Timestamps: Introduction: 00:02:00 Why there should be a nation-wide framework to regulate AI: 00:04:31 How 61,000 state employees in New Jersey are adopting AI: 00:10:34 Why new tech is key to transforming government services: 00:12:20 The Governor is bringing startups back to New Jersey: 00:17:30 How to stimulate innovation at scale: 00:25:28 The Governor is making New Jersey a top choice for the best talent: 00:33:07 Balancing technological progress while ensuring the workforce isn’t left behind: 00:36:56 We’re moving toward an “allocation economy”: 00:41:39 The Governor’s take on international regulation of AI: 00:43:43 Links to resources mentioned in the episode: Governor Phil Murphy: @GovMurphy More about the New Jersey AI Hub: https://njaihub.org/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Dan Shipper?

  I'd be interested to hear your take on what the proper role for government is as it kind of as it relates to AI and we could break that down at the federal, state and local level. How do you think about it?

• 0:10Speaker 01

  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.

• 0:21Dan Shipper?

  How do you deliver government services with AI?

• 0:23Speaker 01

  First of all, we're training all of our 61,000 employees in generative AI. 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, 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 spend more of their time, but have been unable to.

• 1:01Dan Shipper?

  What do you look to for inspiration when you think about how to successfully stimulate innovation in a state at a government level?

• 1:09Speaker 01

  When you wake up in the morning, look in the mirror and be honest with yourself. Who are you? Who are you not? What can you be? What can you not be? In our case, the happy reality is we were not trying to become an innovation 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 a handle where we're the world leader, but the guts of the industry on all of that, that is, that's it, our sweet spot.

• 1:59Dan Shipper?

  Governor Murphy, welcome to the show.

• 2:01Speaker 01

  Hey, good to be here, Ken. Thanks for having me.

• 2:03Dan Shipper?

  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.

• 2:14Dan Shipper?

  I wanted to start 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 particular way?

• 2:27Speaker 01

  Me personally, honestly, no. But in terms of the actual, I refer to it as a realm, not a technology, but in any of its evidence, it is not. But that's a very narrow answer relative to how much time I spend on artificial intelligence. So, and 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. It's a big weapon that we're using in government to better interact with our residents. The whole ethics associated with it, the community out there more broadly,

• 3:11Speaker 01

  which is growing significantly in New Jersey. So, in a broader sense, it's a big part of my day. But has AI changed your life in a very narrow sense? No, not yet.

• 3:27Dan Shipper?

  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?

• 3:45Speaker 01

  It's complicated, and I'm not sure I've got the answer, and I would venture to say nobody has the answer. The European Union made a big deal last year that they put together their big regulatory paradigm, and that looks stale already, and potentially stifling to the development of the industry. On the other hand, you can't abide by a Wild West, and that is as much if not a bigger concern. I do think, Dan, I'm gonna go out on a limb and say, leaving states to be the regulatory nexus for AI is a mistake.

• 4:29Speaker 01

  I think this is something where you need a national framework, if not an international framework, honestly, but at a minimum, a national framework. And it's almost shocking to me that when you look across the spectrum of the talent in this industry, from the folks who worry about the Wild West, from the folks who could care less about the Wild West than everybody in between, I don't think anybody has figured that out yet.

• 5:04Dan Shipper?

  Okay, and I'm curious, if you think that it should be done at a national level, like, what governs that? What makes you think that it needs to be national rather than state?

• 5:13Speaker 01

  Yeah, so when I say national, I should say this, I apologize for not being more clear, largely as a regulatory matter. We've already become a patchwork quilt country as it relates to rights and freedoms, whether it's reproductive, or gun safety, or voting rights, or you name it. This is, this would be yet another... All encompassing realm. It already is to a certain extent, but it will ultimately touch every aspect of our life. And to think that there's one set of rules in New Jersey and there's a different one in Pennsylvania. I just, for something as pervasive and as

• 5:54Speaker 01

  central as this, I just can't, I can't get my mind around that that's a good idea.

• 5:59Dan Shipper?

  No, I, I think, I think you're totally right. I mean, as a someone who operates an AI business, I, I can't imagine having to, there are enough different statewide rules for like sales tax. I can't imagine adding an AI, AI regulations on top of that. That would be weird.

• 6:15Speaker 01

  It's one thing for how you buy booze or where you buy booze. This, this is in a different realm. It's gotta be at least national.

• 6:24Dan Shipper?

  Okay. So, well, that's on the regulatory side, but there's a lot of different ways that governments interact with new technologies. So what about, what about in terms of non-regulatory? I know, I know there's a lot of New Jersey initiatives you're doing that relate to AI. So, so tell me more about that.

• 6:40Speaker 01

  Yeah. So there, there are, and, and I'll, I'll tell you a story that is sort of at the base of this. New Jersey sells very well. You gotta wonder why I'm starting here. Trust me. And hopefully it'll make sense. New Jersey sells very well around the world. So we do a lot of economic missions with great success.

• 7:04Dan Shipper?

  Trenton makes, the world takes.

• 7:07Speaker 01

  Exactly. Exactly. We call ourselves, you ready for this? The world's state.

• 7:14Speaker 01

  You heard it here. We literally just announced a big economic mission to several Gulf countries for next month. We just literally announced that this morning. As part of that, we treat California essentially as a nation state. It's, it would be the fifth or sixth largest economy in the world if it were a country. It has a huge amount of similarities to, to our economy. So we go out there once or twice a year.

• 7:47Speaker 01

  Usually in the South for film and television would become a huge player in film and TV globally. And in the North, it's almost exclusively for technology and more recently for generative AI. And we had a sort of seminal dinner at this point, I guess, two plus, two and a half years ago, in the Bay Area. 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.

• 8:27Speaker 01

  And I asked them, hey, what's 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. So it's clear that the ground zero for the talent, at least at AI, was in the Bay Area. And I asked them, hey, why here and why not in a place like New Jersey? And it turns out the answer is talent, period. They had all sorts of other frustrations with the way business was conducted, regulations,

• 9:11Speaker 01

  taxes, whatever it might be, cost of living. But they said the reason they're in the Bay Area is talent. And when I look in the mirror and look at New Jersey, I see a state, the first word that comes to mind is talent, particularly in the STEM fields, particularly in the innovation economy. So we started out, literally, that was the trigger. We started, so listen, we could be a major player in this space. When I say player, I mean economic development, grow companies here, in research, in regulatory matters, in ethics, in delivering government services more efficiently to our residents,

• 9:55Speaker 01

  in all of, all of the above. And on that last one, unlike regulation.

• 10:01Speaker 01

  Where I think we can have a, I'm not suggesting we can't contribute to the regulatory discussion. I'm more referring when I said nationally to the framework on government services. I think we can lead the nation in terms of more efficient, smarter delivery of government service. On that, I'm a huge bolt and we're up to our eyeballs doing just that as we speak.

• 10:25Dan Shipper?

  Give me, can you give me a concrete example of what that looks like? How do you deliver government services with AI?

• 10:31Speaker 01

  First of all, we're training all of our 61,000 employees in generative AI. Secondly, the low hanging fruit won't surprise you. 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, 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 spend more of

• 11:16Speaker 01

  their time, but have been unable to.

• 11:18Dan Shipper?

  Yeah.

• 11:19Speaker 01

  It's still early, but the, but the, the returns are extremely promising.

• 11:24Dan Shipper?

  When you say training, uh, all, all state employees in generative AI, what does that look like? What kind of skills are you, are you training them in?

• 11:32Speaker 01

  It's our version of the co-pilot, essentially, and how to use that.

• 11:36Dan Shipper?

  AI co-pilot. So it's sort of like a chat GPT, but built by Microsoft.

• 11:40Speaker 01

  Exactly. And, and ours is unique to our particular operation, but it's that, that's sort of a, i- i- if you're using the word in a different context than it normally gets used, I view it as kind of an accelerant. Uh, it, it allows you to jump higher, faster, stronger than you otherwise would have been.

• 12:01Dan Shipper?

  And help me understand what that looks like. I mean, um, I was at the, 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, born and bred. Um, and I'm in New York now and, um, uh, you know, you call it the MVC, the Motor Vehicle Commission, but I, and then in New York, it's the DMV. Um, and I went to the DMV and like, It's really where fun goes to die, unfortunately.

• 12:28Dan Shipper?

  And there's a lot of, um, there's a lot of time that's spent like I went and filled out, you know, you wait, you get a number, then you fill out a form and then you go to the counter and then they say, um, you forgot one of your documents, like 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?

• 12:52Speaker 01

  Well, I have to say, I want to be fair in terms of credit or not credit to AI per se. We had, we had an epiphany five years ago during the, uh, the throes of the pandemic. The two areas that are most retail in our government are motor vehicles commission, number one, and number two is our department of labor workforce development in particular around unemployment benefits. And you could imagine in the throes of the pandemic, both frustration with motor vehicles appointments and the historic tidal wave of unemployment insurance benefit claims were coming at us morning, noon and night. And we had no

• 13:36Speaker 01

  choice but to reorient our entire operations. So even putting AI aside, I'll go down to motor vehicles. In fact, literally just had a, a zoom meeting with the head of the commission today and her team. This is overwhelmingly an online experience these days. It's overwhelmingly, if you need to go in, in person, it's by appointment as opposed to you're standing in a 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 pandemic. Uh, the AI piece, I think, if you were to say where has it

• 14:20Speaker 01

  helped, it, it has prevented the, um, it's preempted is a better word. Uh, I need to show two electric utility bills or two proof of.

• 14:33Speaker 01

  My permanent home address, that's all preempted and taken out of the equation. I think call centers are a better example. They're getting, calls are getting answered much more quickly. You're able to use large language models to basically come up with 99% of the answers of whatever a resident might have in any particular area. 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. And I think we're at most in the first couple of pitches in the top half of the first inning.

• 15:12Dan Shipper?

  Yeah, I think that's a really interesting question, which is,

• 15:17Dan Shipper?

  how is it possible or what have you learned about, you know, integrating technology like this over a vast workforce and, and, you know, supporting other people in the state to do it? As a, as a non-expert and, and who are you bringing around the table? How do you do that effectively to figure out like decisions to make and support to give?

• 15:38Speaker 01

  So there's that great phrase from a Supreme Court Justice whose name I always forget. When he's asked to define pornography, he's, I can't define it, but I know it when I see it.

• 15:47Dan Shipper?

  Yeah.

• 15:48Speaker 01

  Count me in the extreme edge of the, I know it when I see it as it relates to generative AI. We have mercifully for the residents of New Jersey. We have some serious people who are at, at the helm here. So one woman in particular, Beth Novak, who is, 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 technology savant and she is, she was our chief of innovation. She's become our senior AI strategist as of about a year or so ago.

• 16:31Speaker 01

  And, and I just use her as one example. I'm, I'm, I'm giving broad directional input. 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 folks who are literally experts or 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?

• 17:03Dan Shipper?

  Well, let's talk about the economic development aspect. If you're spending a lot of time there, describe to us what your economic development plan is for AI in New Jersey.

• 17:13Speaker 01

  So that's probably the most profound takeaway from that dinner I mentioned, that there's no reason why New Jersey can't have a significant presence with both the talent and the companies on the East Coast. Maybe with New York City, by the way, we do a lot constructively with New York City, and I think there's a good amount of symbiosis on this one as well. And one more wrinkle, which is not specific to AI. New Jersey's economy is innovation-heavy, STEM-heavy. But it became, prior to our time here, it became big corporate-heavy.

• 17:54Speaker 01

  We love the big corporates, that's not the point, and we've got a lot of them and we're proud that we've got them and we're getting more regularly. But we had lost our way of a startup culture. The venture capital money was going elsewhere, the talent was going elsewhere. So again, as a general strategy, we came up with a formula to build what we call strategic innovation centers. We've done 10 of them. I'll give you one non-AI example. Fintech, financial technology. New Jersey's had the middle and back office of Wall Street for decades. It's a natural for us.

• 18:33Speaker 01

  So we got a higher ed player, Stevens Institute of Technology, a big corporate, provincial, financial headquartered in Newark. Our economic development authority putting significant money to work. And an accelerator, in this case, one of the biggest in the world plug and play from the Bay Area. And that's the Strategic Innovation Center. And lots of things will come out of that, including research and job opportunities and all sorts of things, including several dozen startups a year.

• 19:05Speaker 01

  We've now done 10 of these. So we decided that generative AI was absolutely right for one of those strategic investment centers. And as we speak, we announced over a year ago, we just added to the team a few weeks ago, we have a something called the New Jersey AI Hub. It is a venture with Princeton University and most recently with Microsoft and CoreWeave, which is growing like a weed, a hyperscaler, New Jersey headquartered, founded, horned bread in Jersey as our partners. To be determined what the accelerator role looks like on that one. That's still evolving.

• 19:50Speaker 01

  And that to us will be a great nexus for research, for students to participate, for the big corporates to exchange ideas, but I think most importantly, to accelerate, ignite, I think is a better word, the startup community in and around the network created by those four partners. You're already seeing evidence of that. CoreWeave is the best example. We'll have a fund associated with that. Those are in some of these strategic innovation centers, not in all of them. But that to me is what I'm most excited about. And guess what?

• 20:31Speaker 01

  For the latest period for data that's available on venture capital, which is the first half of 2024, in terms of destination of VC, New Jersey's back in the top three American states behind only California and New York. So that's, that's a place that we want to be. We feel like it's our right, given our innovation history, Edison, Einstein, Bell Labs, you name it, that's our rightful place and I'm happy to say we're reclaiming that place.

• 21:03Dan Shipper?

  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 stimulate innovation. So it seems like you get together a big company, a university, maybe a couple of other players. And are you establishing like a campus or like a building or like, what does it actually mean to have an innovation hub?

• 21:29Speaker 01

  I think in most cases, if not all, there's a physical location. There is a financial commitment from the state through our Economic Development Authority.

• 21:42Speaker 01

  There's now over $250 million of private capital committed across these 10 entities.

• 21:50Dan Shipper?

  Committed to do what, like fund startups?

• 21:53Speaker 01

  Yeah, to everything from help fund the building fit out to all the way, as I mentioned, to the AI case and some of the others as well. Funds that would invest in startups. Some of them have open lab space. Bell Labs themselves are, they are still in Jersey. They're operated by Nokia. They decided that they're, they had two campuses. They, in the old days, they only have one today.

• 22:29Speaker 01

  They looked around the world, literally, to try to figure out where they should locate. And they chose, I'm happy to say, New Jersey to stay here, but to move to New Brunswick into something called the Helix. And they themselves will be part of a, of one of these strategic innovation centers. We just announced it a couple of weeks ago. So it, not to be all over the place, but it, it does depend on the particular center in question.

• 23:00Dan Shipper?

  Okay, got it. Yeah, I'm definitely mostly asking about the AI hub, but, but yeah, in general, I think that's also interesting. Do you have any models that you look at when you?

• 23:10Speaker 01

  If you're in the business, as my late mother would say, if you're known by the company you keep. New Jersey and the Economic Development Authority, keeping company with Princeton University, which you know well, your former hometown. At Microsoft and CoreWeave, we're keeping damn good company.

• 23:27Dan Shipper?

  I do, 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+ and so.

• 23:39Speaker 01

  I might work with my position sit on the board, so I will take it upon myself to to investigate your transcript.

• 23:47Dan Shipper?

  Thank you. It's good to have friends in high places.

• 23:50Speaker 01

  They are incredible. That institution is, I didn't go there. It's incredible. The leadership team is incredible. I've never been around more impressive talent in my life.

• 24:04Dan Shipper?

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• 24:49Dan Shipper?

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• 25:32Speaker 01

  So I think a couple of things. One is, we always say, when you wake up in the morning, look in the mirror and be honest with yourself. Who are you? Or are you not? What can you be, what can you not be? In our case, the happy reality is we were not trying to become an innovation state or economy. That is who we are. I'm gonna die trying to make cars and trucks again in New Jersey. I fear I will die trying in my time left. But if you're talking about AI, pharmaceutical, bio, life sciences, tech, telecom, green

• 26:10Speaker 01

  economy, film, television, digital, fintech, sports betting, not just the handle, we're the world leader, but the guts of the industry, on all of that, that is, that's in our sweet spot. So we're trying to recapture something, as opposed to a state going from scratch or from ground zero and trying to become that, that's hard to do. In our case, we, we had, 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. So I was committed to refinding our way, and it was pretty obvious, you never bat

• 26:52Speaker 01

  a thousand, but we had held on to most of the big companies, and we still attract big companies. That wasn't our issue, although we don't take any of that for granted, for sure. Our issue was we, as I mentioned earlier, we had lost our, our way in the startup community. So we brought a bunch of weapons to work on that. The Strategic Innovation Center is the best example, and I give Tim Sullivan, who runs our Economic Development 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 of success?

• 27:35Speaker 01

  And rip pages out of their playbook. We do it morning, noon, and night. So I look at Harvard, MIT, and Boston, where I was born and grew up. I worked at the Bay Area. We did an economic mission in November to Cambridge, England, to understand what their magic was. We do, we did this in Berlin. We did it in Seoul, South Korea. We, as I mentioned, we go to California and treat California like a nation state. We're constantly sponging for good ideas to jumpstart, further develop the innovation economy.

• 28:16Dan Shipper?

  I think that's really interesting. It makes a lot of sense. Like, play to your strengths. New Jersey, obviously, there's a lot, lot going on in New Jersey. You've got Princeton University, that's a big one. I have some New Jersey lore, having grown up there. Like, movie industry started there before, before it went to California. Is it, I think Bloomberg is headquartered there. Or at least they have a gigantic, gigantic office in New Jersey.

• 28:41Speaker 01

  They're not headquartered here, but they're here. We've got a big media presence. CNBC is, has a big presence, the National Basketball Association, the NFL,

• 28:55Speaker 01

  Comcast, there's a whole lot of folks. Increasingly, the film and television business would, would become a global, globally significant player. So Netflix is building a 300-acre campus. There's a big camp, Lionsgate is building a big one in the South Ward of Newark. There's a, another one that's being built in Bayonne, New Jersey. So that's an area where we are, we're now globally competitive and intend to remain so.

• 29:25Dan Shipper?

  And when you say, uh, New Jersey sort of lost its way, in particular on the startup front. Is that like a, like a marketing problem? Like, there's a lot of great business stuff happening in New Jersey and technology 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?

• 29:47Speaker 01

  So as we sit here today, I'll repeat, we're back. So we're now, you know, we're poised to have many hundreds more startups a year than we would have eight years ago. And as I mentioned, the venture capital numbers are bearing that out. CoreWeave is the best example out there, but happily not the only one. Why did it happen in the past? I don't think there was one moment or one reason. I think the transfer of hands and the somewhat downsizing of Bell Labs probably helped. We still export too many of our high school students to universities. We have the number one public education system in America, and one of our main exports are 12th graders going to college. That was part of it.

• 30:32Speaker 01

  I think we lost a little of the coolness factor, you know, the live, work, play that, you know, you saw the Boston area, Cambridge, Brooklyn where you are, Manhattan to a certain extent, Bay Area, that they, they were able to corner the coolness market. We've pulled, we'll pull that back. But if you like sports, entertainment, live, work, play, walkable communities, rapid transit, public transportation, you know, we put a lot, we legalized weed, we're expanding liquor

• 31:15Speaker 01

  licenses. So probably 20 different levers we're pulling, not any one of them, while the strategic innovation centers would be the one big one I would point to. We have a very turbocharged angel investment, tax credit.

• 31:36Speaker 01

  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 with success. Again, we're not perfect, but we have lost our way. No one moment, no one reason, but we've thrown a lot against the wall. And in the aggregate, at least, it feels like it's working.

• 32:01Dan Shipper?

  Yeah. One of the things that makes me think about is, you know, 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. Those places have really well-established networks that are very hard to disintermediate or change. But 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 direct-to-consumer commerce,

• 32:45Dan Shipper?

  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 into your strengths in New Jersey, what those what those things are like if we if we 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 is what does that look like?

• 33:07Speaker 01

  Yeah. First of all, I think generically, when I pitch the state, the two words that I start with are talent and location. And secondly, I also say to folks, every state has a bumper sticker. Ours is the number one state in America to raise a family. So we're particularly good. This is more generic than you want, but I'll get to that in a second. We're particularly good at.

• 33:33Speaker 01

  A young couple, they've just met the girl or guy of their dreams. They've just gotten married, they're just thinking about having a kid, or they just had a kid. Between that age, whatever that is, and junior, the last kid graduating from high school. That's, we dominate in that space. And a lot of what we do is to make sure we continue dominating that space. And by the way, keep or attract more young people, particularly to stay after college or stay for college. 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.

• 34:13Speaker 01

  In terms of slicing it more thinly, if you, if you put a gun to my head, the, the area where I think you'll see the biggest impact, and I think we will be a, a leader in this space. And that is bio, life science, pharmaceuticals. That's our natural, one of our natural wheelhouses. As you know, Princeton is in the central part of the state where a lot of that industry resides. Bristol Myers, Johnson and John.

• 34:41Dan Shipper?

  I grew up right next to Bristol Myers, Myers campus.

• 34:45Speaker 01

  You know exactly where they are, they've still got many thousands in that campus. If you said specifically, you're, you're, the analogy to your New York City direct to consumer, I think will be bio, life sciences, pharmaceuticals.

• 35:00Dan Shipper?

  Is there anything AI related that, that you're doing in that area specifically?

• 35:05Speaker 01

  Well, it wouldn't be me. It would be at these companies, but we hope this hub will support that. But I think drug discovery is going to be the, the, the mother lode here. The pharmaceutical industry is at a hard time explaining why costs are what they are. And by the way, they're, they only contribute to a slice of that cost. Let's put aside PBMs and insurance companies and hospital systems and providers. But they also have had a hard time, and it's understandable with the man on the street, if you will, explaining why, you know, only 5% of their research dollars actually leads to a

• 35:50Speaker 01

  successful FDA approved drug discovery.

• 35:54Speaker 01

  And I think this will be a huge weapon in that space in particular. We're not doing that. We hope that by creating the right environment, which is usually talent, research. It's not an accident that the Boston Cambridge area has had the success they've had. It's overwhelmingly MIT and Harvard and the talent and the research. We think we've got as strong a horse in that race as anybody with Princeton University. We start in a good place. As I say, number one public education system in America, highest concentration of scientists and research professionals per square mile in the world.

• 36:39Speaker 01

  That's a good place to start. And I think drug discovery is one of many, but I think will be a huge example. We look back five or 10 years from now.

• 36:49Dan Shipper?

  We spent a lot of time in this interview talking about interesting and exciting use cases for AI. And that's because I'm excited about it. So that's what I'm interested in. But I think also a lot of people, it feels scary. 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? 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, like all that kind of stuff. How do you think about it?

• 37:27Speaker 01

  Yeah, I mean, just like any, there are all sorts of federal laws, but there are state laws too in a lot of the realms. So this would be no exception. But I think you have to have a national framework. Listen, we think a lot about it. I'll give you two sort of specific, one which is very relevant to us in New Jersey and state government, another one which is probably more relevant to us, you and me as American citizens, peace-loving people, in my case, a former ambassador.

• 37:58Speaker 01

  In the first case, you want to hope and do everything you can to extend that trend of upskilling as opposed to job replacement. In other words, you do more with the team you have on the field as opposed to doing what you're doing now, or even more with a smaller team. I don't want that. I want 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 more mundane, prosaic elements of anybody's job.

• 38:40Speaker 01

  So making sure that happens and allaying people's fears is one area where there's a lot of anxiety and we're doing everything we can to address that. And at the other end of the spectrum, the Wild West in the global context, frankly, the Wild West lately in the American context, but we can leave that. No politics for this.

• 39:06Speaker 01

  But you know, the race to do, you fill in the blank.

• 39:11Speaker 01

  And clearly, the Chinese have put an enormous amount of focus on this, as have we. And we're just gonna have to, I think we're gonna be grappling with what that looks like in terms of global architecture for a long time. I don't think there's the answer to that, particularly given the tensions that we have right now around the world, which are going up and not down.

• 39:39Dan Shipper?

  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 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 learning about it? Instead of, you know, I think familiarity breeds comfort and unfamiliarity breeds fear. How do you think about doing that communication on a state level, if you do it all?

• 40:13Speaker 01

  Yeah, I mean, we're in violent agreement on that. It's part of the reason why we wanted to train everybody. It was not just the benefits you get from the training. But it's the getting people comfortable or more comfortable with the whole notion. And I think, I'm knocking on wood, I think that is working. We've surveyed our people. We've surveyed the private sector. We take, you know, we're a fact-based operation. We're not making a lot of gut decisions. And I think the more people use it and see, in fact, in their own personal, professional lives that they're able to I hate the word upskill, sounds like I just graduated from a McKinsey training class.

• 40:57Speaker 01

  I think it does, nothing against McKinsey, but I think it does capture the reality. So there's stuff up here that I've been wanting to do that's more strategic, if you will, 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, that I've been wired in, that I now have help on, that I didn't have before. And I think the longer that runway is that people can see that's in fact how it works, the more comfortable, less anxious folks will be.

• 41:32Dan Shipper?

  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, 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.

• 41:56Dan Shipper?

  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 any kind of, any kind of worker in the next five to 10 years are going to have to do. Just you're a model manager instead of a human manager. And that that seems to be, um, when people start to get that, it feels incredibly empowering. Cause yeah, you're right. You can kind of like move out of the sort of hamster wheel of I gotta do all these repetitive tasks and into I'm, I'm thinking I'm doing much more creative work than I, um, than I ever could have before.

• 42:40Speaker 01

  That makes complete sense. And I'll say this somewhat not tongue in cheek, but I'm going to circle back. I know where our time is almost up to where we started. I'm not an AI expert, but as a, as a senior manager, in my case, in the private sector, in as a diplomat, now as governor, allocating my time, the time of others, uh, resources, um, arguably it's the biggest part of my job. So you may well see folks like myself, who you would never mistake for you in terms of your experience and expertise. You may see this come around a little bit here in terms of, um, that sort of almost CEO model.

• 43:25Speaker 01

  How do we move things around? How do we optimize? It's an interesting, it's a very interesting point and it feels like that's where we're headed.

• 43:32Dan Shipper?

  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. Yeah, obviously you mentioned geopolitical tensions with China. Like, what do you think is the right, um, AI strategy internationally? It seems like not something that we can just go out unilaterally alone.

• 43:52Speaker 01

  I, I think that's right. Although you have to have certainly as a national defense matter, you've got to have an, an America first element here. Well, I mentioned earlier, I, I think the, the, the view is, uh, has been determined that the Europeans overcorrected in terms of their framework around the industry. And I think that will have profound implications, particularly if you're going to have some fracture, fracturing rather, in the transatlantic alliance. It looks like at the moment we are, which I think is a huge mistake. But if that's true, um, American technology will less likely be driving European innovation than it is today.

• 44:34Speaker 01

  They're going to have to figure out a way to, to drive that far more within their own four walls. As it relates to China, I'll leave Russia, North Korea and around aside with three of the other members of the quartet and focus on China because China has the most emphasis on this space, arguably our biggest economic competitor, arguably our biggest geopolitical competitor. I think you've got to, this is going to sound easy and it's incredibly complicated. You're going to have to have a relationship where we're talking, where there is some

• 45:16Speaker 01

  channels of communication, where we're going to be very clear about our respective interests, what we care most deeply about, they'll be clear about what they care most deeply about, but also at the same time find areas of common ground and common cause. And I would hope this would be, listen, we're going to have our own national defense interests, I get that, but beyond that, I would hope this would be on the list of areas where we could have some amount of transparency and openness. Intellectual property theft, I'm sad to say, is a constant concern with them as a counterpart.

• 45:59Speaker 01

  So you've got to find some way where you're, you know, maybe deep seek was the first step in some sort of transformation that if they're going to be an open book, you know, we could be an open book and that's maybe the first step of a long journey. We shall see.

• 46:17Dan Shipper?

  We shall see, indeed. Well, I think that's our time. Governor Murphy, thank you so much for joining us.

• 46:23Speaker 01

  Dan, thank you so much for having me. You are welcome back in Jersey anytime.

• 46:27Dan Shipper?

  I'll be visiting my mom soon, so maybe I'll drop by.

• 46:31Speaker 01

  Give her a hug for me.

• 46:41Speaker 02

  Oh my gosh, folks. You absolutely, positively have to smash that like button and subscribe to AI and I. Why? Because this show is the epitome of awesomeness. It's like finding a treasure chest in your backyard. But instead of gold, it's filled with pure, unadulterated knowledge bombs about ChatGPT. Every episode is a roller coaster of emotions, insights, and laughter that will leave you on the edge of your seat, 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. So do yourself a favor. Hit like, smash subscribe, and strap in for the ride of your life. And now, without any further ado, let me just say, Dan, I'm absolutely, hopelessly in love with you.