00:00So what will make it change your view and say that, okay, AI is now materially affecting AI
00:04credit quality? So I think it's important to just say like AI is a huge umbrella of things, right?
00:11It can be technology, it can be a whole bunch of things. It can be data center investment and
00:17digital infrastructure. I think for governments, what we're really looking at is how they can
00:22leverage the efficiencies or the operational aspects of AI tools, you know, co-pilot,
00:28things of that nature. And it's probably not going to be sort of an overnight transition to where it
00:35affects credit quality. Even our companies, I'm sure Bloomberg, I know S&P Global Ratings, like
00:39we're still trying to figure out how to best utilize it while also protecting intellectual property or
00:46confidential information. And I think for governments, that's a key aspect is ensuring that they
00:51don't inadvertently release confidential information. But how do we know whether governments are actually
00:56saving money with AI rather than just adding a very expensive tech layer on top of it?
01:01I think that it will come, but it's not going to come right away. You know, you have to amortize
01:06that investment before you can really leverage the outcomes of it. So it's probably going to be maybe
01:12in a couple of years or something like that, that maybe the cost savings are really evident. I think
01:18it will also happen as a number of people retire from government services, which we're beginning to see,
01:23and maybe they're backfilled with, you know, a tool or something that can do that repeatable task,
01:30like look at a permit to make sure it's fully complete or read an HR employment form or something
01:35like that. I'm thinking that some states, some municipalities will inevitably move faster than
01:40others in AI investments and adoption. For instance, a very simplistic way of thinking about it might be
01:45California, which is home to Silicon Valley, will probably have a comfort level with the technology
01:49that perhaps other states don't. How do you think about potential early adopters and the opportunities
01:54that that creates? I think there's a lot of opportunities, but what's key is making sure
01:59your employees are trained and comfortable with the tools. So, you know, do they know exactly how to
02:05make sure that the tool is not hallucinating maybe some outcomes that or some information that you're
02:11trying to get access to, you know, making sure it's not erroneous. So you want to make sure that there's
02:16that human person reviewing the information. I think generally people are getting more and more
02:22comfortable with the tools, especially maybe those that are off the shelf, like Copilot or
02:26ChatGDP or something. But sometimes I think organizations, governments, not-for-profit enterprises
02:33will have to do a bit of customization to make sure that it's unique to their organization and
02:38can accommodate certain aspects of their organization that might be a little bit different than the,
02:43you know, just Microsoft Copilot off the shelf. Do you think, well, there's that idea that personnel
02:49is policy. Do you think that elections will lead to governments, different governments that are
02:53inconsistent with applying the use of this technology, investing in it and adopting it overall,
02:59that will get swings from one extreme to the other, depending on who's leading that particular office?
03:04I'm not sure the election outcomes would drive that necessarily at the local level,
03:09but I definitely can foresee that some organizations who either have highly complex operations,
03:15let's say like a utility or, you know, New York City or some other large states that have very
03:22complex organizations, they might be a little bit quicker to adopt it because they might see the
03:27benefit sooner than maybe some of smaller organizations and governments that we rate.
03:32I know it's hard to generalize, but generalizing, are governments moving fast enough or do you
03:38think bureaucracy and procurement are risking leaving them behind? I think procurement for
03:44governments, as you probably know, there are typically at points at which a governing body has to either
03:52okay the procurement or, you know, go forward with the procurement based on a certain value of the
03:59contract or something of that nature. Obviously, there's, you know, infrastructure projects that
04:05are bid out and you sometimes have to take the lowest bidder of that project depending upon what,
04:10how the contract is formulated. So I'm not exactly sure that, you know, governments are always
04:17necessarily best positioned to be like early adopters, but I definitely see, we observe and we hear from
04:24management teams, particularly in places like the healthcare industry and acute care providers that
04:30might be adopting a little more quickly. So is that the industry that's kind of leading the way out of
04:35everything that you're surveying that you kind of monitor the healthcare industry is moving the
04:39quickest? I would say I'm not sure they're moving the quickest, but I would say there might be a little
04:44further ahead because they're already familiar with a lot of sort of the optimization with through
04:50electronic healthcare records that were adopted in the 2010s and, and other things where they can
04:55leverage maybe some, um, you know, if you're watching any medical TV show, you know, they're all
05:01doing like, you know, AI assisted notes on files and things like that. Yeah. Yeah. So, I mean, I think
05:08that that's not untrue. It is, you know, fictional in on TV, but it's actually happening as well. So I
05:14think
05:15there are a little more motivated just based on some of the things that they've already seen in their
05:19industry that are a bit more AI like, if you will. I do have, we have 20 seconds left, but
05:24you made a
05:24point of, you saw that in the pit. I was going to ask, what's one function that you see this
05:28to be
05:28the most actionable in the near future? Maybe the first that the governments will adopt.
05:33Well, I think we're already seeing some of it, which I think is really beneficial in like a 311
05:37system where someone calls in and needs something or maybe report something and it gets sort of like,
05:43you know, your voice automation gets you to the right department. I think that that is a really
05:48hopeful thing for governments to be actioning on. And it's kind of, I wouldn't say easy because
05:53nothing's easy, but I would say it's probably a little easier than some other things that they
05:57might be using AI for.
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