Transcript: 'We Interviewed New Jersey Governor Phil Murphy About AI'

The transcript of AI & I with New Jersey Governor Phil Murphy is below. Watch on X or YouTube, or listen on Spotify or Apple Podcasts.

Timestamps

1. Introduction: 00:02:00
2. Why there should be a nation-wide framework to regulate AI: 00:05:12
3. How 61,000 state employees in New Jersey are adopting AI: 00:12:02
4. Why new tech is key to transforming government services: 00:13:52
5. The Governor is bringing startups back to New Jersey: 00:18:40
6. How to stimulate innovation at scale: 00:22:35
7. The Governor is making New Jersey a top choice for the best talent: 00:30:20
8. Balancing technological progress while ensuring the workforce isn’t left behind: 00:37:30
9. We’re moving toward an “allocation economy”: 00:42:02
10. The Governor’s take on international regulation of AI: 00:44:10

Transcript

Dan Shipper (00:02:00)

Governor Murphy, welcome to the show.

Phil Murphy (00:02:02)

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

Dan Shipper (00:02:06)

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. I wanted to start and just ask you 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?

Phil Murphy (00:02:30)

Me personally? Honestly, no. But in terms of the actual— I refer to it as a realm, not a technology. In any of its evidence it has not. But that's a very narrow answer relative to how much time I spend on artificial intelligence. 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 and the whole ethics associated with it. The community out there more broadly, which is growing significantly in New Jersey. So, in a broader sense, it's a big part of my day, but has AI changed my life in a narrow sense, no—not yet.

Dan Shipper (00:03:30)

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. What do you think about it?

Phil Murphy (00:03:48)

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. 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 and everybody in between, I don't think anybody has figured that out yet.

Dan Shipper (00:05:08)

Okay. And I'm curious: If you think that it should be done at a national level, what governs that? What makes you think that it needs to be national rather than state?

Phil Murphy (00:05:20)

Yeah, so when I say national, I should say this—I apologize for not being more clear—largely as a regulatory matter, because you don't want— 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 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 as a different one in Pennsylvania, for something as pervasive and as central as this, I just can't get my mind around that that's a good idea.

Dan Shipper (00:06:05)

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 like, sales tax. I can't imagine adding AI regulations on top of that. That would be weird.

Phil Murphy (00:06:20)

It's one thing when you buy booze or where you buy booze. This is in a different realm. It’s gotta be at least national.

Dan Shipper (00:06:30)

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 in terms of non-regulatory? I know there's a lot of New Jersey initiatives you're doing that relate to AI. So tell me more about that.

Phil Murphy (00:06:50)

Yeah. So there are, and I'll tell you a story that is 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. New Jersey sells very well around the world. So we do a lot of economic missions, which is a great success.

Dan Shipper (00:07:10)

Trenton makes, the world takes.

Phil Murphy (00:7:20)

Exactly, exactly. We call ourselves—are you ready for this—the world's state. You heard it here first.

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 would be the fifth- or sixth-largest economy in the world—as a world country. It has a huge amount of similarities to our economy. So we go out there once or twice a year, 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-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. 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 $1 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, 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 and all of all of the above. And on that last one, unlike regulation, where I think we can have a— I'm not suggesting we can't contribute to the regular regulatory discussion. I'm referring more 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 bull and we're up to our eyeballs doing just that as we speak.

Dan Shipper (00:11:55)

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

Phil Murphy (00:12:00)

First of all, we're training all of our 61,000 employees in generative AI. Secondly, the low-hanging fruit won't surprise you. Call centers. Need an appointment at the 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—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. It's still early, but the returns are extremely promising.

Dan Shipper (00:12:55)

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

Phil Murphy (00:13:05)

It’s our version of Copilot essentially, and how do you use that?

Dan Shipper (00:13:16)

AI Copilot? So it's sort of like a ChatGPT, but built by Microsoft. 

Phil Murphy (00:13:20)

Exactly. And ours is unique to our particular operation, but that's sort of a— If you're using the word in a different context than it normally gets used, I view it as kind of an accelerant. It allows you to jump higher, faster, stronger than you otherwise would've been, and helps me understand what that looks like.

Dan Shipper (00:13:40)

I'm in New York. I grew up in New Jersey, which we talked about before the show. So New Jersey, born and bred. And I'm in New York now and you call it the MVC, the Motor Vehicle Commission. But then in New York, it's the DMV. And I went to the DMV and it's really where fun goes to die, unfortunately, and there's a lot of time that’s spent— You wait, you get a number, then you fill out a form, and then you go to the counter. And then they say 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 the whole thing kind of sucks for everyone. What does an AI-enabled MVC look like?

Phil Murphy (00:14:25)

Well, I have to say, I want to be fair in terms of credit or not credit to AI per se. We had an epiphany five years ago during the throes of the pandemic. The two areas that are most retail in our government are the Motor Vehicles Commission—number one. And number two is our Department of Labor and workforce development, in particular, around unemployment benefits. 

And you can 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 choice but to reorient our entire operations. So, even putting AI aside, I'll go down to Motor Vehicles— In fact, I literally just had a Zoom meeting with the head of the commission today and her team. This is overwhelmingly an online experience these days. 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. The AI piece, I think, if you were to say, where it helped, it has prevented the— It has preempted is a better word. I need to show electric utility bills or proof of 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 and are getting answered much more quickly. You’re able to use large language models to basically come up with 99 percent 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. 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.

Dan Shipper (00:16:45)

I think that's a really interesting question, which is how is it possible or what have you learned about integrating technology like this over a vast workforce and 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 decisions to make and support to give?

Phil Murphy (00:17:10)

So there's that great phrase from a Supreme Court justice. His name, I always forget. When he's asked to define pornography, he said, I can't define it, but I know it when I see it. Count me in the extreme edge of the, I know what I see, as it relates to generative AI. Mercifully for the residents of New Jersey, we have some serious people who are at the helm here. So one woman in particular, Beth Novak, who was an advisor to President Barack Obama, Chancellor Angela Merkel—who I know from my time as ambassador there—and Prime Minister David Cameron. She's an AI technology savant, and she is our Chief of Innovation. She's become our Senior AI Strategist as of about a year or so ago. And just use her as one example, 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 that are far more expert than I that are actually driving the specific decisions. What's the training look like? Where do we apply this, etc?

Dan Shipper (00:18:35)

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.

Phil Murphy (00:18:45)

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 it's innovation heavy, STEM heavy, but, prior to our time here, it became big corporate heavy. We love big corporations—that's not the point, and we'll get a lot of them. And we're proud that we've got them and we're getting them 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 natural for us. So we got a higher ed player, Stevens Institute of Technology and a big corporate, Prudential Financial, headquartered in Newark. Our economic development authority is 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, job opportunities, and all sorts of things, including several dozen startups a year. 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 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 hyperscale, New Jersey-headquartered, founded, born and bred in Jersey, as our partners to be determined what the accelerator role looks like on that one that's still evolving 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 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? 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 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.

Dan Shipper (00:23:35)

I love it. Well, I just wanna 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 with a big company, a university, maybe a couple other players, and are you establishing a campus or a building? Or what does it actually mean to have an innovation hub?

Phil Murphy (00:23:00)

In most cases, the answer is— I'm just trying to think. My buddy Natalie Hamilton is with me. 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. There's now over $250 million of private capital committed across these 10 entities.

Dan Shipper (00:23:20)

Committed to doing what? Like, fund startups?

Phil Murphy (00:23:25)

Yeah, everything from to help fund the building fit out to all the ways I mentioned in 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 still in Jersey. They're operated by Nokia. They decided that there—they had two campuses, in the old days. They only have one today. 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 one of these strategic innovation centers. We just announced it a couple of weeks ago. So not to be all over the place, but it does depend on the particular center in question.

Dan Shipper (00:24:30)

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

Phil Murphy (00:24:40)

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 keep in company with Princeton University, which you know well, your former hometown, Microsoft, and Corweave. We're keeping damn good company.

Dan Shipper (00:23:00)

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—

Phil Murphy (00:23:10)

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

Dan Shipper (00:23:15)

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

Phil Murphy (00:23:20)

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 talents in my life.

Dan Shipper (00:25:40)

It really is an amazing place. But I am curious when you think about, okay, so these innovation hubs—Iis that a model that you saw work somewhere else, 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 to successfully stimulate innovation in a state at a government level?

Phil Murphy (00:26:00)

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? 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. I'm going to 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 economy, film, television, digital, fintech, sports betting, not just to handle where we're the world leader, but the guts of the industry on all of that.

That is what'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 have had it for several decades. And by the way, I'm not making a political case here because it was on both sides of the aisle. We lost our way in the innovation economy. So I was committed to refinding our way and it was pretty obvious. You never beat 1.000, 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 as I mentioned earlier, we had lost our way in the startup community.

So we have 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 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 in the Bay Area. We did an economic mission in November to Cambridge, England, to understand what their magic was. We did this in Berlin. We did it in Seoul, South Korea. As I mentioned, we go to California and treat California like a nation-state. We're constantly sponging for good ideas to jumpstart and further develop the innovation economy.

Dan Shipper (00:28:50)

I think that's really interesting. It makes a lot of sense. Like, play to your strengths in 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—the movie industry started there before, before it went to California. I think Bloomberg is headquartered there, or at least they have a gigantic office in New Jersey.

Phil Murphy (00:29:10)

They're not headquartered here, but they're here. We've got a big media presence. CNBC has a big presence, the National Basketball Association, the NFL. Comcast has a whole lot of folks. Increasingly, the film and television business would become a globally significant player. So Netflix is building a 300 acre campus. There's a big campus— Lionsgate is building a big one in the south ward of Newark. There's another one that's being built in Bayonne, New Jersey. So. That's an area where we're now globally competitive and intend to remain.

Dan Shipper (00:29:55)

And when you say New Jersey sort of lost its way in particular on the startup front. Is that a marketing problem? 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 did something happen that caused people to be less likely to want to start a company in New Jersey?

Phil Murphy (00:30:15)

So as we sit here today, I'll repeat, we're back. So we're now 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 is 12th graders going to college. That was part of it. I think we lost a little of the coolness factor—the live, work, play that you saw in the Austin area, Cambridge, Brooklyn, where you are, Manhattan, to a certain extent, the Bay Area where they were able to corner the coolness market. We've pulled that back if you like sports entertainment, live, work, play walkable communities, rapid transit, public transportation. We legalized weed, we're expanding liquor licenses. So probably 20 different levers we're pulling, 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 tax credit. 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.

Dan Shipper (00:32:30)

Well, one of the things that makes me think about it 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 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 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. If you want to do fintech stuff or you want to do direct to consumer commerce, New York's actually a pretty good option. And 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 things are. 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 does that look like?

Phil Murphy (00:33:30)

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: 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, the last kid graduating from high school, 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, 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. In terms of slicing it more thinly if you put a gun to my head, the area where I think you'll see the biggest impact and I think we will be a leader in this space is bio-life sciences and 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 Johnson.

Dan Shipper (00:35:15)

I grew up right next to Bristol Myers’s campus.

Phil Murphy (00:35:20)

You know exactly where they are. There's still many thousands in that campus. If you said specifically— Your analogy to your New York City direct-to-consumer, I think it will be bio-life sciences and pharmaceuticals.

Dan Shipper (00:35:30)

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

Phil Murphy (00:35:35)

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 motherload here. The pharmaceutical industry is having a hard time explaining why costs are what they are. And by the way, 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 only 5 percent of their research dollars actually leads to a successful FDA approved drug discovery. 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 and research. It's not an accident that the Boston-Cambridge area has had the success it’s had. It's overwhelmingly MIT and Harvard and the talent of the research. We think we've got as strong a horse in that race as anybody with Princeton University for us. And we start in a good place. I say, the number one public education system in America, highest concentration of scientists and research professionals per square mile in the world. That’s a good place to start. And I think drug discovery is one of many, but I think it will be a huge example. We look back five or 10 years from now.

Dan Shipper (00:37:20)

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 to 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 it? 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. What do you think about it?

Phil Murphy (00:38:00)

There are all sorts of federal laws, but there are state laws too in a lot of 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 specific ones, which are very relevant to us in New Jersey and the state government. Another one, which will be more relevant to us. You and me as American citizens, peace loving people. In my case, a former ambassador. 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 it. 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. 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 read that no politics for this. But the race to do you fill in the blank. and clearly the Chinese have put an enormous amount of focus on this—as have we. And I think we're going to 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.

Dan Shipper (00:40:10)

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 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?

Phil Murphy (00:40:40)

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'm knocking on wood—I think that is working. We've surveyed our people. We've surveyed the private sector. We take 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 that the word upskill—it sounds like I just graduated from a McKinsey training class. 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's, 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.

Dan Shipper (00:42:00)

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. 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 5–10 years are going to have to do, just you're a model manager instead of a human manager. And that that seems to be when people start to get that, it feels incredibly empowering because, yeah, you're right. You can kind of 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.

Phil Murphy (00:43:10)

That makes complete sense, and I'll play this somewhat—not tongue-in-cheek, but I'm going to circle back—I know our time is almost up—to where we started. I'm not your AI expert, but as a senior manager, in my case, in the private sector. As a diplomat, now as governor, allocating my time, the time of others, resources. 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 that sort of almost CEO model. How do we move things around? How do we optimize? It's a very interesting point and it feels like that's where we're headed.

Dan Shipper (00:44:00)

Definitely. I think so. And I know we only have a little bit of time left, but I just wanted to get your quick take on this internationally. Obviously you mentioned geopolitical tensions with China. What do you think is the right AI strategy internationally? It seems like not something that we can just go at unilaterally alone.

Phil Murphy (00:44:20)

I think that's right. Although you have to have it certainly as a national defense matter. You've got to have an America first element here. As I mentioned earlier, I think the view 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 fracturing in the transatlantic alliance. It looks like we are at the moment, which I think is a huge mistake, but if that's true, American technology will less likely be driving European innovation than it is today. They're going to have to figure out a way to drive that far more within their own four walls as it relates to China. I'll leave Russia, North Korea and a side who are 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. 

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 are some channels of communication, where we're going to be very clear about our respective interests, and 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 gonna 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 and as a counterpart, so you've got to find some way where you're— You know, maybe DeepSeek was the first step in some sort of transformation. If they're going to be an open book, we could be an open book and that's maybe the first step of a long journey. We shall see.

Dan Shipper (00:46:50)

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

Phil Murphy (00:46:55)

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

Dan Shipper (00:46:58)

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

Phil Murphy (00:47:00)

Give her a hug for me.

Thanks to Scott Nover for editorial support.

Dan Shipper is the cofounder and CEO of Every, where he writes the Chain of Thought column and hosts the podcast AI & I. You can follow him on X at @danshipper and on LinkedIn, and Every on X at @every and on LinkedIn.

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