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On Today's Bloomberg Intelligence Show, we dig inside the big business stories impacting Wall Street and the global markets.
Each and every week, are going to provide in depth research and data on some of the two thousand companies and one hundred and thirty industries our analysts cover worldwide.
Today, we'll look at why Apple says it's iPhone sales in China are falling.
Plus we're going to dive into the world of art intelligence and how it's going to impact job organizations going forward.
But first we'll begin in the retail sector. Earlier in the week, Target reported fourth quarter profit that beat analyst expectations.
So this comes as the company reduced its stockpile of merchandise by about twelve percent during the quarter. So Target also confirmed it's going to launch a paid membership program, going up against rivals like Amazon and Walmart.
For more, co host Bailey Lipschutz and I were joined by Jennifer bartashis Bloomberg's senior retail analysts. Were first asked Jennifer why investors are excited about Target.
They've really revealed their plan for growth over the next several years and that is resonating well with investors, and it's all about recapturing top plane growth, traffic, market share, and they're a little bit more upbeat on where they see the consumer right now.
And when we look at inventory being an issue that was such a big problem for Target during the pandemic, it does seem like that's being worked through. Kind of what's your expectation with how Target is handling their inventory ahead of schedule or not a head schedule.
Yeah, they've done a major pivot with inventory, and obviously they had huge issues a couple of years ago with markdowns, and they've really been able to write size inventory that's shown up where inventory right now is actually lower than it was last year, and yet in stocks are better
than they've been. That focus on those retail fundamentals of making sure that you have things in the stores and in stock has really been playing through and driving some of the results that they've seen, and a lot of that stems from inventory. And so right now they're very well positioned going into twenty twenty four and that should hopefully be a tailwind for them for the rest of this fiscal year.
An Affinity Card, can you explain what's going on there?
They're kind of reimagining their loyalty program. So the baseline was Target Circle, which was free to join, and they have one hundred million users that have joined it, and that's where you can go in and save different offers and you get an extra ten percent off your paper towels you know that week and that brand. What they're doing is they're making it so you don't have to
search and save. You get the things automatically when you check out, and if you're a Red Card holder, for forty nine dollars, you can get unlimited free delivery, same day free delivery to your house and they're calling this Target three sixty. You can also subscribe to just that if you're not a Red Card holder. Also an introductory price of forty nine, but it will go up over time,
although they didn't say to what. So it's a move where they're trying to get, you know, a little bit deeper into consumers' lives, you know, doing more home delivery. There's some additional perks in there where you can access all of what Ship does, which is their same day delivery service, and that includes being able to shop at
other retailers. So that's kind of the differentiator here with regards to the membership program that once you have it, you could also have your Target run include something from Costco for example. But it's early days and we'll see how much appetite consumers have for yet another membership that they have to pay for.
Well, what are your expectations on that? Because I feel like everyone pays for Amazon Prime and Walmart Plus I know has had a strong roll out and has partnerships with different credit cards. Like, what can Target really do to get people to pay another annual fee when it seems like, at least looking at the streaming platforms they're struggling to maintain users.
It's a great question, and I think that's one of the big questions that we're going to need to see as they really talk about what differentiates this program, because you know, forty nine dollars is cheap, but it is an introductory price, and there are a lot of people out there that do delivery, and so you know, when I look at it, I think in order for it to be a successful program, they're going to have to really do something extraordinary that appeals to people to prompt
them to pay extra And historically, you know, Target's formula for success has never been mimicking others. It's been about kind of forging their own path. And I think this is an example where it's going to be very very important for them to do that. But it's not clear yet how that's going to be realized.
And how does Target play into a recession. Are they one of the companies that can weather the storm because of their loyalty or how does that play out just given their typical demographics.
If there is a recession. With their typical demographics, Target's customer base is extremely loyal, but Target's product mix does skew to more discretionary items, and so whenever there's a pullback and spending, it tends to have an outsized impact on Target versus other big box retailers. Now, Target has been really focused in the last eighteen months, especially on value. They've launched some new private label brands that are meant to be the cheapest option in every category in the store.
So they're trying to respond to that. So they have the breadth of category and they have the loyalty of consumers that they can weather a recession, but it will make it harder for them to get back to that top line growth and that expansion of margin that they're talking about if we find ourselves in the midst of a recession.
Hey, Jen, how do I differentiate how much shopper between Target and Walmart?
It's all about perception, right When you think about Walmart, it is usually about lowest price. Walmart is a EDLP. Every day you get the lowest possible price. They've got a very big assortment and they have some perks with regards to their Walmart Plus program. When people think of Target, they think a little bit more of discovery, They think a little bit more about inspiration than functionality, and that's where you really see the divergence between those two retailers.
I will say, when I go to Target, I always end up buying more than I want, where if I go to Walmart, I'm kind of in and out. Jen question off of that comparison, I always talk up the fact that Walmart owned Sam's Club. When you look at the company makeup, how much does that differentiate Walmart versus some of the other peers, just given as you mentioned Target potentially partnering with Costco if you're using their membership card.
Yeah, so obviously there's a great benefit to Walmart of having both it's US Walmart stores as well as the Sam's Club stores, because they really can capture spending by different groups of people and for different shopping reasons. Now, when I talked about shipped, it's not so much that you get the benefits of a Costco membership, for example,
with Target. It's just more that you can have your delivery person pick up purchases from other retailers, which is something that isn't in vetted in a Walmart program, for example. But that Target membership fee is going to be competing with your Costco membership fee. It'll be you know, competing with a bjays membership fee along with all of your
streaming services and everything else out there. So you know, Walmart definitely benefits from the scale of having both the course stores and Sam's Club, but it is a little bit of a different business model than what we're talking about with Target.
Oh.
Thanks to Jen Bartashis Bloomberg Intelligence senior retail analysts.
All right, we turned out a big tech So this week we learned that Apple iPhone sales in China fell by a surprising twenty four percent. Now this was over the first six weeks of twenty twenty four. Those figures came from the Counterpoint Research firm.
For more on this, co host Bailey Lipshaltz and I, we're joined by anaag Rana, Bloomberg Intelligence Senior technology analyst. We first asked Anurag what's causing this to decline in the early part of twenty twenty four.
This is the same story that's been going on for the last six to nine months, ever since Wallwei released their higher end phone last year. So Apple's been losing market share there that has been you know, you could say opened or coupled with consumer weakness in China. And it's all that's you know, driving these problems right now.
When I look at the PGEL function on the terminal, iPhone accounts for more than half of Apple's revenue China call it a fifth of their sales anak. When you look at those numbers, what does this actually mean for Apple if they're going to see that competition eating into their sales.
Yeah, I think it's going to be a tough time for Apple in China for that at least this year and maybe into next year before they can, let's say, make some inroads in India and other markets. Emerging markets is the real growth driver for Apple, there is no two ways about it. And and you know iPhone is the big growth driver. So if phones are not selling in China, that's a problem for Apple. It means numbers need to come down even more for Apple this year.
You know, we saw about double digit sales drop in China last quarter. I looked up on MDL consensus is about seven percent drop in China for this quarter. I think that number needs to creep up to someone in the low double digit decline going forward. It's a painful situation for Apple, and frankly, there aren't at many rosy things looking forward, at least for twenty twenty four.
So I guess the biggest concern for Apple obviously is competition, because they haven't really had that robust of a competitor and they're part of the market. Are there any responses Apple can make here from a competitive landscape other than lowering the price point?
Yeah, Paul, I think there is a little more hype in that competition news than reality only because Huahwei didn't release a phone for many years, So that you can think about it. If you have an install base of WAWE phones. I mean, let's say you know that's X and that hasn't been updated for four or five six years,
and you just certainly get a brand new phone. All of those people are going to go and refresh that, So I think you should take that as a bigger factor, plus the subsidies they are getting in China from the local providers. So I think Apple will do okay in China over the long term. But I think that's not going to be a twenty twenty fourth story.
And you mentioned emerging markets as the next driver. What countries, what regions are going to be able to pay up for what I would say, is quite an expensive phone.
Yeah, I think that's the most important question, and I think you know, just by the sheer size of it, India is the next one. But frankly speaking, right now, Apple doesn't even operate in you know, five percent of the entire market because of the price point of the phone. I think the strategy India is going to be a mix of the lower phone the se as well as the refurbished phone where the price point is even lower. But having said that, I think India is a developing country.
The middle class is getting more richer, so I think that's going to be the next big growth catalyst. But this is it's not going to play out in twenty four to twenty five. That's more of a I would submit to long term story.
We've talked about this before that Apple might introduce a lower price phone into India for just that reason. Is that something they're still considering or will they just wait for the market to kind of move up to where the Apple phone price point is.
I think it's going to be the latter. I've done a lot of analysis of how much share they can gain if they drop the S price by fifty dollars hundred dollars, and you know, when I publish that stuff, I think they actually raise the price by fifty bucks. So they don't believe in dropping prices. They are more on a margin story. So think of Apple more on the long term basis right now, not on the short term. I don't think they're going to you know, I would
say swap margins for market share. They've never done that in their history, whether it was on the mac side or on the phone side.
And quickly anorak, I look at the news, there's no more Apple car. There's tepid reception to the vision pro What actually drives the stock, what drives sales in the next twelve to eighteen months.
Yeah, I think that's the most important question for Apple investors. And I think there's going to be an event in June, the World Wide Developers Conference, where they have pledged that they're going to show a lot of AI enhancements to
the operating system. I think that really is the one wildcard that can completely change the sentiment of the company, both in terms of sales and the gloomy investor sentiment only because remember, Apple has a distribution network that stands, you know, next to nobody out there in terms of you know, affluent people using their phones. More than one billion devices connected just on the smartphone. I think that
really is the big driver. One of the things I was thinking about was if you go back, you know, five years, seven years, there were apps such as trip Advisors an Yelp where people used to go for their you know, specialized functions for restaurant advices and tourism. But when you look at somebody like Google, a lot of that traffic has moved on to them because they control
the distribution. I think Apple has the same ability, but they have to show up with some AI products otherwise that's not going to.
Flow our Thanks to Ana rog Rana Bloomberg Intelligence Senior Technology Channels, I com.
Going to bring a break down the role of AI in sports analytics.
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Earlier in the week, Bloomberg Intelligence broadcasted live from the campus of the New Jersey Institute of Technology. Paul was pumped and the main topic of conversation was AI.
We took a look at zealous Analytics and Austin based sports analytics company that evaluates, predicts, and improves player and team performance in sports.
So one of our guests was Evana Serk, senior product scientist at Zealis Analytics, and we asked Havana how Zealos uses AI in sports.
This field that has expanded in last maybe ten years of a lot in other sports. Even before that, it was in baseball that was one of the first sports. If you've seen Moneyball, that's that's really yes.
Yeah, okay, the moneyball Okay. And so it's basically like how to position, like what players to put where combinations? Is it that kind of stuff?
Correct? Correct? So, so player evaluation in game decision strategy, that's sort of sort of things. Yeah.
So again, played for your starter for nja's basketball. You also represented your native Croatia and youth basketball. So you're great at basketball, but you're also a math nerd to the nth degree. She got a BS and a pH degree and applied mathematics from njiit focusing on computational fluid dynamics.
I don't know what that means.
I don't know what that means. That's art, but okay, I don't know. So a great mathematician, great basketball player. Let's put it all together. What are some of the really good applications for some of that technology we've seen? You mentioned moneyball for you know that we've seen it in baseball. What other applications are out there that you think? It seems like we're in the very early innings of that.
Early on, it started with just using basic data, so box scores, play by play, and then a lot of sports in recent years have a what's called player tracking data, meaning we have locations of the players on the court or on a pitch, on a field, whichever sport we're
talking about, at a high resolution. So from that data we can extract not only things that are counted in a box score, but also other things that happened during the game that you wouldn't see counted in like a basic box score for example.
What are some of the common questions that like coaches or owners come to you with the.
Biggest question is how do we value players? How do we find which players teams should sign, how long of a contract, how much money should be on a contract. That's one side, So that's the player evaluation side, and then the other side is coaching and in game decision making. So which situations are producing the most value for the teams? Which situations are creating better opportunities to score?
I know, like in baseball, major league baseball and in minor league baseball. Now it's coming into all the other parts of baseball. The analytics people, the data people versus maybe some of the more traditionalists. They kind of butt heads on occasion. So how much chanalytics do you use versus just my gut I think this player will do well. How do you kind of bridge that topic?
Yeah? Yeah, So that's that's a big important thing, because you can just have data without the domain expertise. And I think that's something that we Adzealas have a really good strength, is that we have the experts in data and statistics in AI in machine learning. But we also have a lot of people who worked in sports teams and have that sort of experience and know which questions the teams want to answer, what's useful for them, and how can we help them best.
So yeah, because when you were saying what AI could help you do, it feels like that's not what a coach is supposed to do. But you're saying that you need someone to interpret how to manage that and stuff.
Right, right, So you need like a bridge between the data and what's what's happening on the court.
All right, If I'm an agent representing a player, now this is I got to learn this stuff because the team's gonna come at.
Me and say, this is what the program tells me.
That, Yeah, your client's worth blank because his or her OPS is this and blah blah blah blah blah, And you got to come back and say, no, I think he's better than that, and I think he's really more. So do you work with the agents and players themselves as well, because they better be smart on this stuff.
Yeah, Yeah, that's it's a great area where where ZELS is growing as well in some of our sports. But but Yeah, an agent cannot learn all of this on their own, so having a company or a contractor who can.
So do you guys work with agents and players directly.
In certain sports?
Yes, yeah, but not all across the board. So you also, as Paul was mentioned earlier, you got your BS and your PhD in applied mathematics and nj T. Because we're here and we're talking about NJIT kind of bridges the gap between learning stuff and then putting it out into the world. How did this help you evolve your career and leave you where you are today?
Yeah?
Even though I studied competitional fluidnamics, it's not exactly data science, but I've learned a lot of skills.
There were transitions, by the way, so you can pretend it is.
There's a little skills that transfer from from one field to the other, for example, coding, analyzing large data sets, creating visualizations, and communicating scientific results to regular audience.
Are there some sports that are embracing AI or just technology analytics more than others?
That's historically in baseball, particularly because they had more advanced data for the longest time, But other sports now also have the player tracking data and are starting to get more on that side.
How did you wind up in this? Because if you played basketball, right, because you're originally from Croatia, right, So you played basketball and then you somehow wound up and deep into analytics. How did you do that?
Well?
I always loved math and I always loved basketball, and this was a perfect combination of the two.
Where are we do you think in terms of the evolution of applying data and AI to sports? Because it just the statistics. I've been following sports my entire life, and I'm listening to a broadcast and they're saying stuff. I have no idea what they're talking about, Like now batting average is an important anymore to baseball and now it's on bass plus slugging. I don't know. I mean, it seems like we need a tutorial a lot of these broadcasts. Where can this go? Do you think?
Yeah? I wouldn't know about baseball because I don't really understand the rules coming from Croatia. But in basketball, we you know, from now we have a player location data, but it's also growing towards player kinematics data, which NBA has available for Saturday's season Kinematics kinematics, so the locations of players waist, elbow, shoulder, all of the joints, so more detailed data of like player movements and yeah, so
how how players are shooting? And you can extract all this more detailed information.
Are thanks now to Havana Serk, senior product scientists at Zalis Analytics.
Let's stick with our conversations on artificial intelligence. At the New Jersey Institute of Technology, we looked at the company Avonaut, a leading provider of cloud and advisory services. Avonaut was founded as a joint venture between Microsoft and Accenture.
We were joined by Anita Giovanni, global head of Innovation at Avonat, and we asked her how the company approaches AI and how AI will impact organizations going forward.
Yeah, so, we are a global consultancy, as you mentioned MICROSOFTIC Center, joint venture, sixty thousand employees around the world, and what we do is think about AI from a client perspective. How is it that we can support organizations across sectors be AI first and at the same time, we're all going through this journey together. So thinking about ourselves as an organization, how can we be AI first in our own business processes and for our own people so I'm a company and I come to you, what
do you do for me? We think about a lot of things. Are you guys prepared from a people perspective, an organizational perspective, and a process perspective. For example, a lot of people that we interviewed in an AI readiness report said they were enthusiastic and optimistic about AI. That's great. However, half of the leaders said they weren't ready, and only a third of CEOs believe that their top leadership is
AI fluent. So there is a dissonance between the excitement and enthusiasm and the reality of the preparedness of organizations. And what we do is make sure that organizations have the coaching and support they need to get there.
I would think one of the challenges, just speaking for myself is I learned a whole lot speaking to again and the smart people from NJIT what AI is. I'm one of those people that says, if you can't explain it in one sense, you don't understand it. And I don't think I understand it. What's the basic framework that you try to get across your clients about what AI is and what it can mean for them?
Yeah, think about AI and one of the biggest generative AI tools right now through Microsoft is copilots. Think of it as a co pilot, not necessarily a replacement pilot that.
Can allow you to articulating.
Yeah, allow you to do your job more effectively and more efficiently. And so instead of thinking about AI as a job replacement, think about it as a way to replace key tasks and allow you to spend your days in ways that you want to, talking to people, being more relationship focused rather than necessarily summarizing emails or going through data sets, et cetera.
So it's a partner.
So basically I could have some AI. Think go throw my email and like correlate the important parts and give it out, for example, and take it and give it to me, so I don't have to spend my home morning going through and reading reports.
Yeah exactly.
That's really cool. Yeah, and that would make me so much time to go do other stuff.
Yeah.
I mean, think about when you come back from vacation. You probably check your email when you're on vacation. I don't, but for an exact.
Reason, because if I come back, I have like two thousand emails being gone for like a week, and I can't.
Keep that I can't do it if you had the AA tool, what you could do after being away for two weeks. I don't check my email and probably get in trouble for that.
But I don't.
I can come back and say, what did I miss over the last two weeks, go through all my pings on teams, go through all my outlook, and can you prepare for me a summary so that now that I come back, I can actually be ready and can prioritize. That's where it really comes into.
Wow, that's really cool.
Yeah, So what when you sit down with your clients, I mean, what's some of the common requests you get from them or what do they ask for most of the help with I guess.
Yeah.
One of the things that's really top of mind for people is about skill set and training and capability building. So in our survey, we found that eight out of ten people said that twenty hours of their work week, almost fifty percent of their work week can be replaced with AI tools. The challenges they don't know how to use the tools in the most effective and efficient way, so the training around that is critical in the process.
The other is a responsible AI a governance set. Right, Yeah, what are the guard rails that we have to put into place so that people can play creatively in the space.
Do you feel like people and CEOs or board levels are do they now know what they don't know, they are beginning to figure it out, or we're still in the beginning part of that.
I believe we're in the infancy of it. I think there is an infancy of the learning curve, but also an infancy of having the right people in the room, having diverse perspectives. As we think about responsible AI.
And we're hearing you mentioned the I guess the ethical use of AI. I don't know how that's going to evolve. Is that going to be some partnership between public, private, the individual.
I'm not sure I actually know what that means. Well, it just seems like ethical use of AI.
Yeah, it just seems like the technology could get out of control.
Look, as AI and generative AI becomes more ubiquitous, with increased scale comes increased risk. That's just the reality of things. So how do you mitigate those risks? I think one of the most important ways to do that is to have the right people in the room. So, whether that's from a diversity perspective of gender, whether that's having people
of color in the room, people from diverse backgrounds. It's one of the reasons that we do the scholarship program for women in STEM at this very institute, because we want to make sure that they're not brought in as a second thought, but rather at the very beginning of the conversation.
So, what's like an unethical use of AI? Like, where does AI get bad?
Yeah?
Well, I mean, look, you can use you can use AI to create images that don't actually exist. You can put voices on people to say things through their own voice when they may maybe have not said that video. You can think about putting in questions into generative AI that perhaps share data with the broader public that you
didn't want to share that's company specific data. So there's a security component, there's a falsification component, There's lots of different ways you kind of have to be proactive about.
And on this front, once again, maybe at no fault of their own, the government is generations behind where the technology is. I don't know how this plays out, I really don't. I mean, is there a feeling that the industry for a while is going to have to police itself or is there going to be some again public private partnership in terms of regulating this, because this is not the FCC regulating the airwaves. This is really really difficult.
Yeah, it gets complicated. Look, I think there's an individual level to it, an individual level of responsibility, But at the end of the day, it's going to fall on the leaders, the leaders of organizations across the board. If the senior leaders are not thinking about responsible AI, they're not thinking about the AI fluency, no one else is going to think about that. So the responsibility on the leaders is very high.
Our thanks to Anita Givanni, Global head of Innovation at ABANAT.
Coming up on the program, our conversation on AI continues, we speak with Michael Johnson, President of the New Jersey Innovation Institute.
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Earlier in the week, Bloomberg Intelligence broadcasted live from the campus of the New Jersey Institute of Technology, and the main topic of conversation was AI.
We spoke with Michael Johnson, president of the New Jersey Innovation Institute or NJII. It's a standalone corporation owned by NJIT. We first asked Michael what NJII does.
In the US. We have lots of research universities and there's lots of smart people, lots of great resources, but there's this fundamental problem in academia, which is it's tough for the outside world actually leverage those resources. So for governmental organizations for industry, they want access to the cutting edge of AI, for example, but it's tough for them to actually make those connections and interact with faculty. So
NGI is an organization. It's a five oh one C three wholly owned by NGT, and the idea is that we are a standalone corporation that's a conduit between the outside world and NGT, So we make those facilitations, we create unique business models to work with faculty, and we're a quick moving organization, unlike academia, which is you know, tends to be slower and more difficult to work with.
So we're that conduit between them and the outside world and roughly have about one hundred and twenty folks out of organization we're focused on that can.
Just say it's really cool his three year old son is here. I mean, what three year old is going to come and talk about AI. I feel like that just says it all at the end of the day, right, that is the future? So am I a company that goes to you and then you pair me up with something or is it sort of the technology that you're evolving, and then you go pitch it to companies.
How does that work?
It's a bit of inside out and outside in. So we can go to corporations and try and find out what their problems are, what their pain points are, and then go and find faculty you can help out. Or we might have a few faculty that have a very specific problem. They need access to software, they need to access the resources, and we go externally to find a way to work with corporations on that, but it's pairing
the two with each other. And faculty are really smart, they're really focused on their research, but they don't always have the mind to go out and actually execute on consultant type projects for industry. So we help form that framework and along the way we're trying to help with tech transfers, so getting technology out of the university into products and services is always a pain point, and also just generally accelerating innovation and also helping upskille workers.
You know, over the last several quarters, Bloomberg does this analysis. It shows what are companies talking about on their quarterly conference calls, And for the last several quarters, every single company in Y S and P five hundred has talked about AI, with the exception of Apple. Last quarter have I mentioned AI? Which is interesting? What are companies most commonly asking you for help with?
Oh?
Man?
That goes all over the place. It depends in the companies. We have some small mom and pop businesses that just want help, but trying to move towards technology, towards computers. We have other companies, for example, that want to be the bleeding edge of some sort and field. So for example, it might be life sciences, it might be AI for example, and they're asking us to help improve something that they're already doing, or it's a very specific project they're pushing
us to find faculty to help out with. So it kind of depends. We have other folks. For example, Picatinny Arsenal and Department of Defense are looking for just workers, so helping us upscale workers for advanced manufacturing and all sorts of different programs they need help finding talent for so we're trying to help that with that as well.
So JPM we're going to interfew saw this. They had a great piece out that said that some of its corporate customers are slashing manual work by almost ninety percent with its cash flow management tool that runs on AI. And that's the fear, right that we're going to use AI and replace all the workers and those workers don't have any jobs. Is there any truth to that?
It's a great question. So whenever you have technologies they are disruptive, there are going to be jobs certainly that are going to go away. But if you look back to when accel first came out, or when computers first came out, you look at accounting as a great use case. Accountants didn't go away because we were going from a ledger that was literally on paper to a computer based system. We found new questions to answer, new ways that we
could look at our accounting and finances. So I think the jobs are going to change, But the overall number of jobs in that net, I don't know if it will actually reduce. It might increase in some cases. But we're going to answer different questions. We're going to do things much more quickly than we did in the past, for sure.
I guess my lack of knowledge of full appreciation of AIS is I'm just not sure if it's something completely new or is it just the next iteration of what the smart people at NJIT typically do. Is it I'm just not sure what's new about it other than Man, everybody's talking about it, and it was a theme. One of the themes that drove the stock market in twenty twenty three was a concept of AI and the average trader has no idea what AI is, but he's buying stocks because he thinks they're an AI play.
It's been around for decades, right, but we have a couple of technologies that came out in the last two years that have really transformed the way we see AI and while we're talking about it, and the reason is because now it's accessible. So for example, to years ago, if I go into Google and I tell you how do I make chicken palm? I got all these ads, I get all these things that tell me about chicken parm.
I go in a chat GPT and I type that for example, and I get a perfect recipe on how to actually make that, So it becomes very accessible to anyone. And I think that go to market strategy. The open I had of making accessible is what really changed the game. And also the same time computing power is exponentially increasing, it's more accessible. We're now able to use it everywhere from making chicken palm to try and do research.
So what kind of cool stuff are you guys working on right now? Like what were you most excited about?
For us as NGI, what we're very focused on is trying to get things out at the university into the real world. And one specific project that we're working on is actually on law enforcement and body cams. So bodycams is there a sensor that generates a huge amount of data and from those data sets, we're usually looking at them after the fact, so after something bad happens, we're trying to review that situation. What we're trying to do is can we look at that data and predict something
bad is going to happen before it happens. So if we see a pattern between some behaviors, running back time for.
A second, so you have a BTE so you're tracking the behavior to then model behavior later.
Yes. So for example, let's say we see an officer is running more frequently, they're yelling more frequently. That has probably correlated to some behavior outcome, such as excessive use of force. So for example, we might identify this officer as at a much higher likelihood of excessive use in force in the future. Let's intervene and get them training
before something bad happens. So we're trying to build that a software we can actually put onto the hardware and help the law enforcement and help with de escalating situations.
Wow, that's really cool.
What other stuff like?
What are the thing are you excited about?
Oh man, there's so many Take your second best. My second best would definitely be in the drone space. So
drones are another sensor. We're collecting huge amounts of imagery data, and today a lot of that work is actually a person looking at videos, scrolling through video like you would from a VHS tape, and we're using computer vision and AI to actually analyze that data and try to predict what's happening and try to classify certain imagery and answer very specific questions like is a power line going to fail based upon a single picture from a simple drone?
Oh, now that could be really helpful, dependually all the wildfires and stuff that we've had. And then as all the utilities are kind of grappling with like old infrastructure that is not easy to replace, kind of how you manage that? Is it expensive for these companies to use this?
Usually the bottleneck today is data generation and data annotation because there's lots of data, but we have to annotate the data to be actually able to use it. So, for example, if the body cams, we have to know what those events are that we're trying to predict and how she classifying them ahead of time. So that's the real the bottleneck for it in a lot of cases.
All right, thanks to Michael Johnson, president of the New Jersey Innovation.
Institute, let's stick with our conversations on artificial intelligence at the New Jersey Institute of Technology. New Jersey Governor Phil Murphy recently laid out further details of a so called AI moonshot plan. The proposed plan would include seven million dollars to advance AI utilization and opportunities in the state.
We were joined by AI expert Beth Simon Novic, who was recently appointed as New Jersey's first ever Chief AI Strategist, and we asked Beth how she helps implement Governor Phil Murphy's vision of having New Jersey lead the nation in the advancement of AI.
Governor Murphy has said very loud and clear, we have to do better when it comes to technology in terms of embracing the use of technology to grow the economy, to grow jobs in the state, but also to improve how government works. So my job is to work on all of the above and to see what we can do as government to make that easier, to make that better, and to embrace the responsible and ethical use of AI to ensure that we're doing right by our residents.
So what are some of the applications that the governor and the Governor's office thinks AI can do Over the next several years, Where will the residents of New Jersey see it? Do you think?
So this is not a several years from now. The future is already here. And we've been using AI for quite some time, and generative AI since the very beginning, so in many ways that you don't even see or
know about. So, for example, if you're getting a letter from the State of New Jersey about let's say your unemployment benefits, you're getting a letter that has been simplified, that has been written in plain English, that's been written, we hope, more clearly than it would have been before because generative AI can help us to do a first draft.
If you're calling up about your anchor tax relief that the State of New Jerse is giving out to residents, you are hopefully getting your call resolved faster because you get a menu option that's we've written with the help of AI. Because voice to text our call center operators know people are calling in asking the following kinds of questions, we should write these menu options and these instructions and
answers so people can get that information faster. When you're going out, for example, and typing in on a website and telling us comments of how we can do something better on a website like business dot J dot gov, where you can go to start and run and grow
your business everything you need from one place. We're taking the comments we're getting from citizens about what they need about what they want, using AI to help us summarize those comments, synthesize them, and turn that into the information that people want and need front and center. So the goal is government that's more responsive, more informative, and providing services twenty four to seven that are responsive to what people actually want and need.
That's a pretty good pitch. You were also the chief of innovation, right, h Jersey.
I was for many years the chief Innovation Office.
So did the Chief Innovation Officer become the AI strategist or is there also an innovation officer? And I guess I'm trying to understand, like is the innovation thing now AI or can there be other stuff?
There is still other stuff. We have a wonderful new Chief Innovation Officer, Dave Cole, has taken over that title and is leading our efforts to use technology to improve how we bring services to residents. So projects like business dot J dot gov to take the business one, for example, or other digitization of residence services, so that instead of having to go to a government office, you know, between nine and five, you can come to a website, you can use your mobile phone.
Oh my gosh, that'd be.
Amazing transact with government twenty four to seven. That's work that's been underway for a long time, and that doesn't just depend on AI. That is about again, clearer instructions, planer English, things available online, giving you the information front and center that you want and need in the way that people have become accustomed to from the best businesses. We think that government should serve citizens in much the same way, except in the public interest.
Well, New Jersey's had a long history of technological innovation. I think of telecommunications with Bellcore and Bell Labs supporting eighteen teen Verizon. I think about some of the biotech and pharmaceutical companies like Johnson and Johnson based here in New Jersey. I'm wondering, is there support for the young NJ grads that are in a garage somewhere in Jersey City coming up with the next AI type thing. How do we support those people?
Absolutely so, there are a whole number and range of investments that are out there to support people starting new businesses. That's what my colleagues at EDA work on in particular, is ensuring that we're providing those kinds of incentives for people who want to start their business in New Jersey
and grow their business in New Jersey. That's particularly why the government is here to help support those businesses going out and in particular now to look at how we can support new AI businesses or existing businesses who are asking how we can turn around and use AI to improve what we do. It's a question we've been answering for a long time. Before we called it AI. We called it big data.
Yep, right.
So the more the people we're using a lot of businesses have asked themselves, how could I go out and start using data to measure what's working, to measure what customers want, and again to deliver new kinds of services across a range of industries. It's why we've been starting new partnerships, such as with Princeton, around this new AI hub that's been set up so that we can connect some of that tremendous innovation that's coming out of universities
like NJIT, like Rutgers, like Princeton. We're of course, known in this state for having the best universities and the best education system in the country, and we want to connect that back to how we're growing the economy and growing jobs. Hearing the state all right?
Thanks to Bethsimono Noovic, Chief AI Strategist of the State of New Jersey.
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