How Louisiana is driving innovation, A Conversation with Josh Fleig, CIO for the State of Louisiana

You may not think of the State of Louisiana as a software innovation hub but it is doing a lot to attract startups to its state. It has a $100 million seed capital fund to match VC investment dollar for dollar. It is willing to rebate 25% of your software development dollars for software development done in its state. It is also
providing sales tax rebates to attract large data centers to its state.

Josh Fleig is responsible for fostering innovation and entrepreneurship across the state, while assisting small businesses with access to award-winning programs and services designed to accelerate growth and elevate Louisiana’s standing as a hub for innovation and high-value jobs.

He is an experienced senior executive with over 20 years at the intersections of technology, economic development and education.

Most recently, Fleig served as the Senior Vice President of Business Development at Greater New Orleans, Inc., where he led his team to developing a project pipeline of over $20 billion. Under his guidance, the team engineered strategies to develop key industries across Louisiana’s Southeast Region, with initiatives ranging from entrepreneurship and innovation to future energy and entertainment.

Before his tenure at GNO, Inc., Josh was a trailblazer in the growth of Louisiana’s technology industry. Starting with the Jindal administration in 2012, he was the architect of a recruitment strategy that sparked dozens of software and digital media project wins at Louisiana Economic Development. His contributions included the co-creation of the state’s Entertainment Development Fund.

Earlier in his career, Josh established a track record of innovation as the Director of Media and Brands at SinglePoint (now Bally’s Corporation). There, he managed publisher relationships for the SaaS business, driving interactive TV engagements that captivated audiences across major broadcasters like CBS, Disney, Viacom and Discovery. His journey into the media industry began at NBCUniversal, where he
thrived as a technical producer in interactive media product design, creating hundreds of groundbreaking fan engagements for NBC Sports, Bravo, Syfy, MSNBC, CNBC and more.

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Hosts: Shirish Nadkarni and Gowri Shankar
Producers: Minee Verma and Eesha Jain
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Transcript

SPEAKER_02 0:01

Welcome to the Startup to Exit podcast, where we will bring you world-class entrepreneurs and VCs to share their hard-earned success stories and secrets. This podcast has been brought to you by Thai Seattle. Thai is a global nonprofit that focuses on fostering entrepreneurship. Thai Seattle offers a range of programs including the Go Vertical Startup Creation Weekend, the Thai Entrepreneur Institute, and the Thai Seattle Intel Network. We encourage you to become a Thai member so you can gain access to these great programs. To become a member, please visit www.seattle.tai.org.

SPEAKER_05 0:43

Hello everybody, welcome back to another episode of uh From Startup to Exit. Uh we have a fantastic uh guest today. Uh and uh once uh uh he starts speaking, uh we will learn how governments interact with uh artificial intelligence and what they do to encourage. Uh it's uh it's a it's uh going to be a fun episode. Uh I, along with Sherish, uh, are part of the Thai Seattle board. Uh Thai Seattle produces this podcast. Uh Shirish and I have been co-hosting for almost a year. We talked to uh very interesting folks who will add uh value to our uh audience, and I'm sure this episode will be the same. Uh Sherish uh is a serial entrepreneur and uh a serial author. Both his books are now uh sold wherever books are sold. Hopefully, you will buy and read them. The first book was titled From Startup Exit, from which we borrowed the title for this podcast. And the second one, Winner Takes All, is about a marketplace. Uh with that said, I'll hand it over to Sharish to introduce our guest and take it away. Sharish.

SPEAKER_03 2:01

Thank you, Gauri. Uh welcome everyone. Um like to uh welcome Josh Feig. I hope I'm pronouncing your name okay. Yeah, that that works. Okay. Um Josh is the Chief Innovation Officer at the state of Louisiana. So welcome, Josh.

SPEAKER_00 2:23

I thank you for having me. I'm I'm excited to be here today. I'm a uh longtime listener, first-time guest. Okay, very good. Very good. So you've heard our podcast before.

SPEAKER_03 2:33

That's wonderful. Uh so before we get started, uh it'd be great if you could talk a little bit about your background, your journey, and how you ended up in your current role.

SPEAKER_00 2:43

Yeah, absolutely. So I don't know how long this podcast is, so please, guys, tell me to speed up my long story if it gets too if it gets too long or boring. Uh but I uh I actually started my career as a high school fine arts teacher. And I was at a very interesting school. This was um early aughts, this was 2002. Um I was in a very interesting high school in in Baton Rouge, Louisiana, that was um that received a large endowment from a private equity firm out of Dallas called LJ7 Fund. Uh well, seven Rosen Funds. LJ7 was the seven of seven Rosen funds. So LJ7 was some of the original money, and seven Rosen funds is some of the original money behind compact computers. So he was an alumni of the brother school, his wife went to the sister school where I taught. And I was I was the only, one of the few people on campus who was just kind of a gearhead, just like technology. And uh this gentleman with seven Rosen Funds came, put a lot of money into the school, and said, I want you guys to be the first one-to-one laptop school in uh in the state of Louisiana. So we said, Great. We um we built out a wireless mesh network across this 14-acre campus, a thousand compact PCs. Um, we actually created a student-run help desk where we um we we were receiving warranty dollars for fixing the compact computers, which allowed us to kind of pay the students to do the work and also learn how to work on work on hardware. And so it was an amazing program. We were years ahead of the rest of the region in this um in this space. And and we just had dollars to to try interesting stuff. And so I got really interested into digital media. Um, I built out this multimedia program for the school. But after a couple years, I was uh I knew that I didn't know what I was doing. I was home homebrewing everything. And so I I left uh education to go to graduate school in New York, uh, went to NYU. Uh and the Tisch School of the Arts within NYU is an interaction design program, um, which is really a um, it's a lot of artist and computer science kind of mashed together, trying to figure out more novel ways to you know to build some kind of human-computer interactions. Uh, and so in that program, um, I got introduced to the Nokia N95 smartphone. And this was like the coolest phone in the world at the time. And uh, you know, we were building these on-deck applications. Um, we were working with an open source um server program called Asterisk at the time that allowed you to you know script SMS interactions, things like that. But this was pre-iPhone. So the the greatest latest was you know were these were these Nokia feature phones. And I just I got really interested in uh mobile interaction. Took a job with NBC Universal right there in New York at the time, in an interactive media product development group, um, right at the end of my time in graduate school. And we were baking um all sorts of different applications to engage NBC um customers, to you know, trying to ultimately drive higher engagement rates for fans across all of the NBC properties. So NBC Sports and CNBC and MSNBC. And it was kind of a Skunk Works group in that we were building these prototypes, testing them with fan bases, and seeing which ones had higher engagement rates. And so some of these were you know synchronous web applications, some of the some of these were applications built into cable boxes. Uh, and then we had SMS, text to television, um, voting, polling on reality TV shows, competition game shows, things like that. And the level of fan engagement on the on the SMS side was way higher than anything else we were doing, way higher than the synchronous web applications, because everyone had a the ability to send a text message. And not everyone was sitting in front of their TV with their laptop open, but everyone had a mobile phone, everyone could text. So the penetration of the technology, um, it's dead simple. You know, you there was no apps to download. There, you know, you you could learn how to do it in seconds. It sort of passed the mom test. Um, and we were actually making money on some of this stuff because we were charging customers, you know, a dollar to vote on, you know, deal or no deal, to enter to win money. Um, and so that was the group at NBC Universal I I worked on for a couple years. And they were owned by GE at the time. It's a very kind of stuffy corporate environment. And I was young and I didn't like wearing a suit every day. I mean, this is not an everyday event for me, but but it was it was not my jam, culturally speaking. I just didn't like working there. But I noticed that the vendor that we use at NBC Universal, who supplied a lot of our underlying SMS technology, our connectivity to all the carriers, um, the software platform that ran all these interactions, um, they were having fun. They were having much more fun than I was having at NBC Universal. So I ended up jumping over to a company called Single Point, um, and and working on the business development team there at Single Point, running major accounts for other media companies, not just NBC Universal, but but ABC Disney, CBS, um, all their different properties, doing similar work just across more you know, more uh large media companies. And that's where I met this guy, Mr. Gowrie Shankar at Single Point. Um, God, what year was this Gallery?

SPEAKER_05 8:38

This was uh 2000. Yeah, eight, somewhere in there. Yeah.

SPEAKER_00 8:44

Somewhere in that range. Um and and and Gowrie can go much deeper to the history of single point, aka wireless services corp, but um that um and that was also my introduction into um you know, being a scrappier, smaller software company, trying to sell into these big clients and and you know, meet their service level requirements and um you know, fix things that were constantly broken, and you know, we were wearing a lot of hats. There were days I was the account executive and there were days that I was on collections, you know, and so but you learn you learn you learn a lot about how to work, uh, had a blast. And then we sold the company in 2012. Is that about right?

SPEAKER_01 9:30

Yep, yeah.

SPEAKER_00 9:31

2012. Um and I uh I had some friends back in Louisiana, which is where I was from. And and we had uh at the time, uh it was the beginning of Governor Bobby Jendal's second term in office. And I'd really watch Jindal from afar. You know, I mean, I was from there, so I obviously kept up with local politics back home. Um, but what the Jindel administration brought to the table was um a super sophisticated administration and state government that the state of Louisiana had not seen for a long time. And these guys were all Ivy League educated, you know, ex-Makinse consultants, dead set on fixing, you know, kind of systemic problems, um, and and very aggressive on the economic development front. And so I uh joined that team in 2012, came back to Louisiana, and helped the broader mission of trying to create more technology jobs in in Louisiana back in 2012. And so I've been in some version of that game since then. Uh here we are 12 years in on that mission.

SPEAKER_03 10:39

So uh what is the um uh mission of your agency and and your specific role? Yeah.

SPEAKER_00 10:47

So the we are our our uncool name is the Department of Economic Development. So we're a state agency where we we uh we we administer a lot of tax credits. Um that's a lot of what we do is you know, we we create products and services that make it an easier place to do business. And so there's a lot of folks in the agency who are responsible for you know administering those, you know, those those programs. But the larger goal of the organization, it is to diversify the state's economy. Um, you know, we we spend a lot of time and energy and resources on attracting uh and growing industries that might not be native. Or in some cases, helping some of those native industries um pivot to new economies, right? Or to or to new transitional kind of periods or forks in the road or whatever that looks like. And you know, I can go into a long spiel about how we're doing that in the energy transition world right now, but but it either way, it's about creating more high-paying, high-value, kind of future-proof jobs in our state.

SPEAKER_03 11:57

And and then um what is your specific role as the uh chief innovation officer?

SPEAKER_00 12:05

So I have fully retired from business development. Um, I am now no longer focused on attraction projects. Um, you know, we think we we sort of divide our house a few different ways. The business development team focuses on attracting large employers here to expand into the region uh or retaining kind of key driver companies, making sure that the people that are here are happy and growing and and not jumping ship to Houston. And so my my shop is is actually new. Um, you know, this is the first time under this new administration where the state has said we need um we need an office focused on on innovation. And so as of July 1, I'm new to the role, it's a new office with a new strategy. Our North Star is startups. How do we help fill the top of the funnel with more high growth technology-enabled startups in the state of Louisiana? So it's creating all of those systems, products and services to help people that can do that, that can create those startups, grow and thrive here in Louisiana. Um, some of those are on the policy side, you know, some of those are tax credits that help uh angel investors invest in companies that are growing in Louisiana. Um sometimes it's it's about you know filling in gaps. Say, look, we we might have really good technology accelerators focused on one geography or one industry, but maybe we're forgetting about trade, right? We're a big trade state, we're a big port state. How do we unlock innovation in things like trade and maritime and third-party logistics and stuff like that? So that's really the role of our organization. It's to grow the overall pie and help fill in gaps where where um we're not doing well.

SPEAKER_03 13:56

I see.

SPEAKER_00 13:57

Okay.

SPEAKER_03 13:58

And um is there uh much startup activity today in the state of Louisiana?

SPEAKER_00 14:04

Yeah, so there's there's a bunch. And and it just depends, you know, we we're not a software hub, right? We it's it's not that's not one of our legacy industries. So so when I think of like our startup activity, um where where we see the most activity um would be in that energy space. So we're a large, not only energy extractor, but we're even bigger energy refiner. So we refine most of the country's oil products or downstream products that kind of come from from oil and gas. Um chemicals are huge in South Louisiana. And so a lot of our innovation currently is aligned with all things, you know, all things energy. Um I think we've been very fortunate over the last few years coming out of COVID because the federal government is is continuing to invest heavily in all things kind of energy transition. And we have um we've landed a number of very sort of large, high-profile federal grant dollars or programs for some of the energy work we're doing because we we we make traditional industry here, we have the infrastructure for that. So it's sort of a no-brainer that we can kind of build on that that legacy.

SPEAKER_03 15:14

But uh in terms of uh tech startups, um is there uh significant uh VC and angel community to fund startups?

SPEAKER_00 15:24

Yeah, so it's a great question. Um so if you actually look at our largest exits, they they they were software plays. Um you know, we had our first billion-dollar exit uh 2021, a company called Lucid that built it was like a network for um buying and selling surveys that were taken online. Uh, and so they sold to a Swedish company called Sent for $1.1 billion. Um previously, a few months prior to that, uh company called Level Set here sold to Procor out of California, construction tech, construction software, the Balton sold liens, construction liens. Um so we we definitely have some pure play software uh in that world. I think the way we think about innovation, at least from our office, is high growth, scalable, technology enabled, right? So it doesn't have to be pure play technology, pure play software, um, any anything, whether it is in our energy world or it's or it's purely software, or it's culture tech, right? I mean, we see a lot of music startups here because we we have music center DNA, we record a lot of music here. I mean, Taylor Swift's last biggest single was recorded here in in New Orleans a couple months ago. Um, her next album was all recorded here in New Orleans. So I think building on that legacy is also super important to us. Um on the VC side, we got a big shot in the arm from the federal government a couple years ago. Uh there's a U.S. Treasury administers a program called SSBCI. So it's the state small business credit initiative. And each state got an allocation of dollars. And this was again, it was a COVID you know relief bill, I think it was under ARPA. Uh, and every state could sort of design a program for their for their allotment under this, under this SSBCI uh treasury initiative. And Louisiana, I think very smartly said, we're gonna put most of our eggs into the venture capital basket. So we we dedicated about $100 million and extra seed capital um to our ecosystem that has to be matched with a dollar of private capital. So effectively it's an injection of $200 million in new seed capital that we're currently pushing through, um, which has been which has been a tremendous boost. Right.

SPEAKER_03 17:43

Got it. Um so are you looking to um states like uh Washington state, uh California, Texas to attract uh startups?

SPEAKER_00 17:54

Yeah, it's a good question. Um so I think our competition is all over the place. Uh you know, I think Texas, because we share a border and because Houston is so large and is is the de facto headquarters for most energy companies, that that's an existential threat for us. So making sure that we're building you know these new energy startups here in Louisiana, I think is our um opportunity because because we don't have the incumbent players headquarters like Exxon and Shell and Chevron and all those guys, we have we have Gulf of Mexico operations for a lot of these companies, but this is not their headquarters. Um we think our opportunity is because we have that infrastructure, because we have the workforce, is to continue to build future energy startups based on that, you know, that legacy infrastructure and that legacy know-how and that legacy workforce. So I'd say that Texas is our absolutely, and Houston specifically, is our is our number one competitor. And then, yeah, I mean, California, obviously, for all things, software innovation is the world's number one competitor. Um, you know, and it's they they set the gold standard globally. And can competing with the Bay Area for software innovation is hard, you know, but but we have to make sure that the people that are here and that love being here and love living here have access to capital and and customers and coaching. So um I don't think it's hard to say that we're competing with you know the Bay Area, but um trying to emulate some of the things that they've done well is part of what we try.

SPEAKER_03 19:26

And so what are the some of the uh uh as you talk to companies in California or Washington State or um uh Texas, uh what are some of the um uh incentives that you're offering startups to uh you know to uh move to Louisiana or to have a portion of their staff located there, etc.

SPEAKER_00 19:47

Yeah, one of the one of the greatest programs we have that that's an is an interesting legacy, but is it's still very much in play, is a software development incentive that we created back in the mid-aughts that it was originally a video game incentive. So if you follow these kind of competitive state tax credit programs, in the early aughts, the film programs took off. And you went from zero states offering film production incentives to Hollywood to like 40 states doing it within about two years with varying success. Um, and and and very unclear, you know, kind of ROI on some of those programs. So a lot of states shut those off. Louisiana's was was actually growing pretty well. And and so around 2005-2006, we created a sister program that was designed to attract video game developers here. Um but it was one of these, it was one of these programs that you know the legislators didn't realize that game companies don't look and act like film companies do. Film companies are mobile by design. They will pick up and and shoot a film anywhere in the world if it's easy and there's dollars available. And game companies don't. I mean, these people are brick and mortar, they report to the same place every day, and their production cycle is years, not months. Um, and so it's kind of just set on the shelf for uh five or six years, and no one was really using this program, but it was a really powerful 25% rebate on your expenses for developing games. So we took that program, we opened it up, and we said, any type of software, and we made that change right around 2010. And that program's been running strong uh for the last 12 years, uh, 14 years, uh, in that we provide a 25% cash rebate to companies developing software. And it's uncapped, it's uncapped for that company, it's uncapped for the whole program, there's no sunset date. So it's a it's an amazing program. Uh modeled after what Quebec does, Montreal sees a lot of this activity as well, so um closely modeled. That for that program. So that that's the most valuable is that rebate. And it is every year you look at all of your software developers and you just tally up what you spent on all those developers, and the state owes you that 25% back in the form of a check. It's a fully refundable program, and it has nothing to do with your tax liability or anything like that.

SPEAKER_03 22:21

That's amazing. So you can recover 25% of your development costs. I mean, that's not insignificant.

SPEAKER_00 22:27

Oh, it's huge. It's a huge program. They're definitely taking advantage of it. We we yeah, so it's interesting. We we have a couple of the larger, I would say, like you know, multinational IT service companies that that leverage the program. Uh IBM uses the program here. They've got about 1,100 people um using that program. Uh CGI uses the program quite actively. They do a lot of like healthcare tech integration of um products into you know various healthcare providers. Um they're big users of the program. DXC, uh, which spun out of HP uh Enterprise Services, also big users of the program. And then you do, you have some game companies as well. Electronic Arts still operates a large operation here uh and leverages this program as well.

SPEAKER_03 23:13

Got it.

SPEAKER_00 23:14

Got it.

SPEAKER_03 23:15

Excellent. Uh over to you, Gabri.

SPEAKER_05 23:18

Great. Uh Josh, uh great to speak to you. Uh there's a one anecdote that uh that that came to my memory when you were talking about uh Nokia phones. Sherish actually had a company at the time called T Mon that uh was building email uh to those devices, right? And eventually T Mon was acquired by Blackberry. So you so it's exactly what um getting email to the phone was the big thing. And if you think of it, in the days it was getting anybody to interact with the phone. Blackberry was the only place where people sent and received email. Team on brought it to every phone, including and Nokia was actually the big hit. And Blackberry kind of saw the gap and acquired them. So it's one of those uh historical, because now everybody thinks, hey, uh, if I want just take an iPhone or Android device, and there's email, the world has email, but it wasn't that long ago when that um was still magic, so to speak.

SPEAKER_00 24:22

Um I was used the first time I ever checked my my Gmail on a you know a Nokia phone. It was magic. Yeah, it was easy and it was very slow, right? And there was no formatting, it was nothing, but it was it was a big deal.

SPEAKER_05 24:38

It was real time. So um uh before we sort of jump into AI and other things, right? So Louisiana State is in Baton Rouge and it's it's a very large university. Uh I mean, compared to the size of your state, it's it's uh it's an extremely large university. And um how have you guys been able to, uh when when I say you guys, I mean the government, this the various administrations, you had a variety of them. How have you worked with the Louisiana State uh to I mean it's a talent war? That's what company. If I'm a company, I'm thinking, do you have talent? 25% is interesting, but if I can't attract talent, that alone won't get me there, right? So how do you foster talent for startups?

SPEAKER_00 25:30

Yep, yep. So you're you're you're 100% right. I mean, I think none of this works if we don't have butts and seats. Yeah. You know, like if we don't have people doing the work, it doesn't, you can create all the financial incentives you want. Um the the universities are absolutely the number one driver of everything we're doing. And in most of the conversations with any sort of knowledge-based, you know, industry or or company begins and ends with higher education. Um, because they they have to make sure that I mean they can relocate a bunch of folks to get things started, but it's you know, with with churn, you're you you have to begin to backfill with locals, or the economic models of doing this kind of stuff just doesn't make sense. So the our approach has been over the last few years, it's it's been there's been a couple different things I think we've found pretty successful. One is we build very deliberate cooperative endeavor agreements with universities that have very measurable deliverables into or in partnership with the companies that are coming into the market. And so I use the IBM example you know quite a bit because it's it's the most demonstrable. But so IBM initially said, look, we're gonna create 800 jobs in the market, but we need the your you know, the graduates coming out of LSU to understand X, Y, and Z. They need to have a you know a baseline understanding of ERPs and big data and you know data analytics. I'm using this as an example. Um, but not only do they need to have these baseline understandings of of these three technologies that matter to us, um, your pipeline is here, we need it to be here. You know, like you your graduates each year are good, but there's just not enough of them. And so we ended up taking dollars, we took $15 million in the example of of the IBM project and working directly with LSU to build these cooperative endeavor agreements that said do two things. Increase the pipeline. Number one is just we gotta get the throughput up. And number two is you need to listen to the IBM guys because they're gonna tell you what they need for you know for you guys to produce so that they can hire your graduates. And that was it. It was come to the table, listen, align curriculum, and then grow the grow the throughput. Uh it wasn't rocket science, but it took a very deliberate mechanism. We we call them cooperative endeavor agreements, but they're contracts. Instead of us just like, you know, endowing the university with more money or us saying, oh, let's go appropriate more dollars to the computer science department or whatever next year, it's very surgical in the sense that it's saying, no, this specific program at this specific university needs to grow its throughput and align its curriculum, and here's the dollars based on that project to get that done. Um so that's that's been our that's been sort of our path over the last decade. And and and look, it's it's been great because if you just if you look at the growth in in those pipelines, it's it's working. In some cases, you know, there's two and three X growth of graduates over the last five and six years.

SPEAKER_05 28:44

Wow, that's um unbelievable. So companies look for continuity and consistency. So you yourself have been in three administrations, right? So as a as a company coming in, uh, you know, the whims and fancies of the administration, whatever their agendas may be, what political uh affiliation they have. I we still have a business to run for the whole globe. How do you how does your office and your agency sort of mask and keep that consistent so that I don't feel like, oh, it's a four-year program, then I'm out. Yeah. It's not four years, it's forever program, so to speak.

unknown 29:25

Yeah.

SPEAKER_00 29:26

No, you're 100% right. I mean, I think we take the long view, so so you first off, you nailed it, I mean, jobs should be apolitical by design, right? We all want, you know, we all want high-paying jobs in our community. Um, and I think by and large, you know, at least my time with our three very different administrations, that's that's been the case. You know, I mean, I think it's new administrations don't typically come in and just tear up contracts just because they have the legal right to do it, because that consistency and predictability is is is critical. Um, you know, and rhetoric changes and and all that kind of stuff. But but at the end of the day, we build 10 and 15 and in some cases even 20-year contracts with these companies so that they know that that they have something they can take to the bank, regardless of political whims and you know what's happening, you know, from the rhetoric perspective or the national scene influencing local states or whatever. Companies don't care at the end of the day, right? They just want to know that they can bank on the talent and the incentives, and it's gonna look the same next year that it looked this year. So I think it's I think it's about having that power to you know to build some kind of an instrument. It's a 10, a 15, or a 20-year contract to say we're here, we're gonna do it, we're gonna support you. And guess what? If the legislature goes in and rips up some statutory incentive and makes a change, um, we're we're gonna make you whole under this contract term. That's critical.

SPEAKER_05 30:57

Got it. That's awesome. Um, so switch gears a little bit, right? So you talked a lot about quote-unquote legacy industries, uh, incorporated technology and your startups coming. So, and if you look at uh AI introduction, seems like the legacy industries are the most to take advantage of. Say, if you're chemicals, the fact that you could ask about what chemical composition is, uh uh, which would be a completely new innovation because otherwise some chemical engineer is looking up the molecules and telling you the answer about you know, ChatGPT can probably tell you. So given your legacy and the pace at which AI innovation is happening, what's your position on how to incorporate it? And what are you guys specifically doing around AI to attract that talent to support your legacy uh industry? It could be wood, it could be oil, it could be anything. They all need AI at the moment. That's somewhat obvious, and without it, it's you know, somebody else will do it, anyways.

SPEAKER_00 32:06

Yep. Look, I mean, I'll say this about AI, and I'm I'm on the record saying this all the time. Um this isn't this isn't Bitcoin or crypto or Dogecoin, right? This isn't something that something that's gonna be heavily debatable whether there's utility or a future or a value or any any of that stuff. This is the evolution of computing, right? We've been working on artificial intelligence since since the beginning. Um I I think you know, generative AI just unlocked the the public support and consciousness behind what has been a long time in the making and accelerated the level of investment, the level of excitement and enthusiasm in AI. And I'm fully on board. And I think it's I think it's time to ride that that wave because big companies are spending a lot of money, VCs are spending a lot of money in artificial intelligence. But the utilities, the utilities there today. I mean, the the the ability for for AI to you know to just make things quicker and easier and more productive for those legacy industries which you mentioned, um, it's it's there today, so it's only going to get better. I would love to see Louisiana be a living lab for applied AI research in those legacy industries. You know, how are we leveraging it to test new energy applications, to, you know, saw timber, whatever that, whatever that looks like. I mean, I think, you know, we're a fortunate state that we still make a lot of stuff here. Um, and so that's a great place to test, you know, how artificial intelligence can help us make it cheaper and faster and better, and you know, new novel approaches to all of that. Um so there's a very few like things we've done in the last couple months to position ourselves to compete in this new world of sort of AI investment. Um, the first thing we did is we passed a bill uh in our spring legislative session that made us um competitive for these large AI data centers. So we all know that infrastructure investment is being poured into these hyperscaler AI investment data centers. And to date, Louisiana just had no real play in data centers. It we also strategically didn't chase them because from an economic development perspective, it's not historically, they're not big job creators. Um where we have a, you know, a I think we have a mind share sort of challenge with storms, although storms really affect, you know, the coastal part of the state. Um, you know, I think it was sort of an uphill battle to convince people that that we're a safe location for data centers. Um but then but then generative AI came on the scene and and the size and scale of investment in some of those large hyperscalers is is unprecedented. And the jobs that are related, I mean, some of these some of these large projects are you know, three, four, five hundred or more jobs in in rural places in a lot of scenarios. So to where you know those jobs are hugely impactful to the communities. So we we passed a bill, the governor signed it into law, went into effect July 1st, that um rebates large data centers their sales tax back on all of the equipment that goes into those large data centers, with the caveat that these are the big ones, these are the ones that are over $200 million in CapEx and over 50 jobs. So these aren't like your edge centers that are run by a telco um, you know, with with one or two employees and 20, 30 million dollars in investment. These are you know, these these are the bigger ones. Um we were able to get that passed and signed into law, and um, we've had a ton of interest just since that thing became law on July 1st um by some of the big folks that are developing and deploying these big hyperscalers. So I know that was a long-winded answer, but I'm all in on AI to wrap.

SPEAKER_05 36:09

So that kind of um see, um one of the interesting things is uh at the moment, infrastructure is attracting a lot of investment in the AI stack, so to speak. There's a lot of VCs putting money in application, but the infrastructure is without it, these applications will still take a long time to come. So if you build on top of that, meaning if you have enough jobs who come in at the infrastructure layer, in theory you could build uh up the stack all the way to the application layer. Uh you also have this energy advantage compared to some other states. I mean, you have you mine a lot of energy, you have a lot of access to energy and you historically have had it, but you've not had the uh sort of confluence. And I think the least cost energy states are likely to actually attract initially um the investments on infrastructure because these things suck a lot of energy. And it is one of those go ahead.

SPEAKER_00 37:14

Yeah, no, you you nailed it. I mean, if you're if I'm looking at some of these projects, some of the projects in our pipeline, gallery, they're like three, four, five gigawatts of projected. And it's, you know, I mean, in some scenarios, these might be the largest industrial users in the state if we can land some of these. Yeah. It's unreal, but you're right. I think they they have to go to places that are flat, that don't move a lot, and and uh have the the ability to supply gigawatts of power in a reasonable time frame without having to go you know build brand new nuclear facilities and stuff like that. Yeah, yeah.

SPEAKER_05 37:47

So uh it's either solar, hydro, or or uh or uh uh you know oil of some some variations.

SPEAKER_00 37:55

Those are the natural gas, you know.

SPEAKER_05 37:56

Yeah, those are the those are the and you have a lot, you have access to lots of tips off the coast and so on and so forth. So you guys have um with that said, uh are um uh are your uh programs now geared to saying, hey, we need because the talent, engineering talent needed for that is different than software engineers, and you still need you still need to go back to to that to that talent base. Are you guys gearing up all over again with uh universities and attracting talent?

SPEAKER_00 38:34

Yeah, we are. So, you know, this is this has like forever been our challenge uh in in economic development, is that um it takes a lot of investment to you know to do these things. Um and so if if if we want to build more capacity for, you know, even uh GPU chip design that enables and unlocks AI, um we we have to have someone on the employer side to say, I'm gonna hire some of these people. I I'm going to, you know, we're we're going to do something with the dollars that you put in as a state agency to create jobs and and wealth from you know from that investment. And so it feels, it sometimes feels reactive. But what we what we try to do is, and we'll use data centers as a good example here. So the data centers that we have that are in our project pipeline today, they're huge. Um, but they're going to be you know built and controlled by the companies. Um and the companies are smarter than we are, they're bigger than we are, they know how to train people and you know, find people and all that kind of stuff. But we use the inertia and the size and the economic impact of these projects to build related programs. So if we're able to land one of these large hyperscalers, the level of investment is so big, we can then find some dollars to say, let's build a chip design facility at Louisiana Tech, for example, that can help us design and fabricate new types of GPUs. Or let's go build an applied research group within LSU or University of Louisiana that can work with legacy industries to implement you know AI solutions within their supply chain or their manufacturing process or whatever. So we sort of use the use these big wins as an ex a as an excuse to go invest in what's coming up next or what else we need there. That that makes sense.

SPEAKER_05 40:36

So are there kind of startups that uh focus on supplying, say, a bot to a government agency? Are they because you have this unique opportunity where you have this incentive, uh you're willing, you're open and testing it. I don't know how many chief innovation officers are there across the 50 states, or you may be the only one. I mean, they have a lot of chief technology officers, but not innovation officers. Uh, how do companies in you know in that vertical application find you and your agency in terms of, hey, how do I engage? Because these are all startups looking for good ideas. Uh they have may have good ideas, may have a VC funding, but the hardest part, and Sharish and I talk a lot to a lot of startups, uh, is go to market. They have a huge go-to-market problem, and it seems like government may be the most attractive in terms of providing a citizenry better services because they can use AI. I mean, you know, otherwise, hey, you can't show up to the DMB every day. I mean, there's DMB supply enough people. No matter how it is.

SPEAKER_00 41:48

God, it can fix so much. I mean, look, I I I I know that, you know, I hope my friends from U.S. Treasury are not listening to this right now, but but we just won a grant. Um, we we can't I think we can't talk about it until mid-September, but we won a grant that was a 15-page application. It was a technical assistance grant. I mean, it's not, it wasn't anything super exciting from a scope perspective. It just helps provide some technical assistance to startups. Um, it was five and a half million bucks. It was a competitive award program. It was a 15-page application. I wrote the entire thing with Chat GPT. I wouldn't have submitted it. I had a team of one right now, or we're trying to grow this, but but I it wouldn't have gotten submitted had had I not had AI. Um so I I fully agree with you. I I think that um, I mean, I think this is a revolution for every public education, government, services. So, one of the things that we're trying to do right now, um, because we're we're a small agency when it comes to the scale of other agencies. We're not operational. You know, we don't we don't run hospitals and we don't build bridges and things like that. So we're about 150 people totally, uh, total in our in our agency. But our goal is to kind of lead by example on um integrating AI, using it in our workflow, and and talking about it to other agencies and talking about it with startups. And one of the things that we did this summer is this is a little bit of a procurement hack, but we actually we got a bill passed this year, again, went into law the same time the data center bill did on July 1st, where it exempted us from the central sort of Office of Technology services for the state. So we no longer need to procure things through central IT, and it exempted us from procurement writ large. So the goal there, A, is just to move faster and so that we can be aligned with businesses, which are which are our customers, but but but B, it's it's it's also just to sort of set that bar, you know, that the state government can actually work and function, and we can integrate some of these new tools into into our environment so that we can better serve those customers and then and then be a test. Bed to show other agencies it's not that hard to work with a startup to integrate some solution to your you know Byzantine process. So that's that's where we're going. The nice thing is the groundwork has been laid. Now we're just beginning to try to figure out how we roll it out and talk about it and implement it and all that good stuff. So I'm I'm excited. I'm excited because I'm a user, because I'm I'm an inherently lazy individual. And it is it's it's made me look more productive, which is which is awesome.

SPEAKER_05 44:30

So uh uh sort of circle back to your roots, right? So uh you're a Louisiana native, uh high school teacher uh after college. Um then uh you know you saw Katrina affect your state badly, uh, and now comes AI. So tie it back to how you as a chief innovation officer, uh COVID being the other thing that happened badly, uh tie it back to chief innovation as your chief innovation officer of the state of Louisiana, how you would take AI into sort of the public education realm because your state uniquely was affected twice in every decade of this century. Katrina in 2000, early 2000, and then uh COVID in the late 2020, because public education was completely dismantled in both those um events, uh so to speak. How do you see that integration happening as the chief innovation officer, especially given where you started your career in public education?

SPEAKER_00 45:36

Yeah. Look, I I I think there's a there's a thousand challenges that that educators face today in public education systems, whether it's local school districts or you know, statewide. Um, I mean the challenges are are are coming at them faster than they can solve them, right? I mean, like it's super hard to recruit and retain, you know, teachers in the classroom. That's a huge challenge. Um not only in dense urban environments, but in in rural environments even even more so. Finding people that are qualified to actually teach, teach our children is a is a big is a big issue. And then the turnover rate is getting worse, it's not getting, it's not getting better. I'm a big, big believer that that you know AI can unlock um you know the potential to just deliver better education to students of of all levels and meet them at their level, which is fascinating. I've been reading Sal Kahn's new book, the uh not Brave New Brave New Words, I think is the name of it, right? Um and I don't know if you know this, but Sal Khan is from New Orleans. He's from he's from the metaphor.

SPEAKER_04 46:43

Yeah, yeah, yeah. He started his uh teaching his, I think his cousins or nieces when he was in Luciana. Yeah, yeah, yeah, yeah.

SPEAKER_00 46:51

Yeah, and so he and so I I've I've been a huge supporter of of Khan Academy over the years, you know, because it the first way of a Khan Academy was just delivering access, right? So that like you you've got the ability to learn math and science in places that are having a hard time delivering those higher level math and science courses. But con Migo is his new product, which is you know, which is built on top of GPT-4 or 4.0 or whichever one we're on now. But but it's its ability to really hone in on meeting individual students where they are is is impressive. And you can't, public education doesn't work like that. You you stick one teacher in a room with 20 to 40 students, right, whatever the number is, and they've got to kind of teach to the middle for the most part and try to bring students up. And it's hard. It's hard to do. And I think AI has the ability to change that and have these very personal educational experiences at scale across all types of geographies, rural, urban, you know, rich, poor, everything in between. So I'm a huge believer in the ability for AI to do that. Um I'm actually working on an interesting project right now. So during COVID, uh the federal government pumped a lot of money into broadband access for all 50 states. You know, said, look, we're we're gonna be we're gonna be doing more of this. We just need to make sure that everyone is connected um to high-speed internet uh across the entire country. And so I was actually at a press conference today at the at the Capitol where we unveiled our, what we call them gumbo grants for um deployment of broadband to these rural communities. Uh and and so it's a $1.4 billion program, most of which are at least the vast majority are the deployment dollars. So it's digging fiber, you know, or putting, you know, bringing solutions to where fiber doesn't make sense, like Starlink or, you know, whatever that's gonna look like. But that's it's impactful and it's great. But what's more interesting is what are we gonna do with that internet in all those 40,000 new locations once it's once it's deployed. And and I think the education piece is the most interesting story there. I think the ability to deliver quality education to hard-to-reach places, you know, we're we're a we're a rural state. I mean, just like much like most much of Washington, right? I mean, most of your population is along the coast and you have this large portion in the middle that's rural. So Louisiana is very similar in the sense that we have a lot of underserved locations. And so what we're trying to do with the non-deployment dollars from this big federal grant program is design some programs that will allow us to figure out how to deploy generative AI products into rural classrooms to improve the level of education for those students. So I'm super excited about it. And then we're and the nice thing is, like we I just stepped into this role in July and inherited this process kind of midstream, and it was early enough to shape it so that we could we could be part of some very interesting you know case studies on on how AI can affect rural classrooms. So I'm looking forward to that. We'll start, you'll hear more about that in the coming months. I think December is when we'll begin to make announcements on what this project's look like. But um, I'm I'm all in on AI in the classroom.

SPEAKER_05 50:11

Excellent. Josh, we could keep talking more. Uh actually, what was striking uh is this could be one where we uh you're the first government official for on our podcast so far. We've been had a lot of VCs and entrepreneurs and uh big companies. So the fact that um uh this uh relationship startups have with the government is always correct, uh you know, uh not it's not easy because they don't know how to navigate it. The fact that you're saying, hey, listen, you come here, we'll make it easy, and we'll give you 25% just because you're locating and help you navigate, I think is the first uh of its kind. Uh it'd be uh super interesting for our audience to hear that. And um also that you are sort of thinking ahead as to how to get AI into both the government and to your citizenry means that uh a lot of startups could could use Louisiana as a as a program to launch their launch their uh applications. And that that's very interesting. So thank you for uh making the time to be on our podcast and uh back to you, Sharish uh, to close it out.

SPEAKER_03 51:28

Great. Thank you, Gari. So uh fascinated to uh uh hear a little bit more about um your plans to take uh AI into uh schools and universities. Um are you doing anything specific with LLMs uh in particular?

SPEAKER_00 51:45

Yeah, so it's a great question. Um we have we within our our department have not yet, but but my ultimate plan is to is to build uh an internal LLM for understanding and navigating just complex government programs. Um, you know, we've we've got a bunch of these programs that have they were built, designed, deployed over different decades at this point, right? And so some of them still exist. The you know, they're they're they're based on statute, they're based on these dense rule sets, and they're kind of a pain in the butt to navigate, even for the even for the staff. I mean, we have a lot of people that spend a lot of time hunting down, you know, stat statutes, hunting down rules, um, so just program administration kind of stuff. I think would be perfect to build you know an LED LLM just to manage to better manage all of these tax credit programs that that we offer, um whether they're state or you know, or federal programs that we work with. Um so that's my that's my goal is to is to build that you know LED version of that. Um I know the universities are all working on it. I mean, they've all within the last six months brought on faculty that are researching some version of open source um you know artificial intelligence. Uh and and I think we'll continue to kind of grow there. My goal would would be to launch and just kind of you know be that be that leader in the space for government agencies where we're we we've made it work for us. Let's then now take that on the road within the Capitol and show the Department of Transportation how to do it and you know health and hospitals and that sort of thing.

SPEAKER_03 53:27

Right. Excellent. So thank you so much, uh Josh. This was uh very instructive uh to understand uh how you are uh deploying various uh uh proposals and policy options and incentives to attract uh startups to uh state of Louisiana. And uh would love to have you come by uh to the state of Washington, talk to startups here, and encourage them to also um you know have an office in your state.

SPEAKER_00 53:56

So I would I would love to do it. I think we need to build it around a Seahawks home game. Um stadiums in the NFL. So I would love it. Thank you. Thank you guys for being with me. I appreciate it. This is awesome. I'll take care.

SPEAKER_04 54:15

Uh oh. Did he cut off? Oh yeah, he dropped off.

SPEAKER_05 54:25

Thank you for listening to our podcast from Startup Exit brought to you by Dai Seattle. Assisting in production today are Isha Jain and Mini Verba. Please subscribe to our podcast and rate our podcast wherever you listen to them. Hope you enjoyed it.