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AI is reshaping how work gets done in institutions, both public and private. However, the impact is unevenconsumer AI chat interfaces like ChatGPT, Copilot, Claude, and Gemini are fundamentally mismatched to the realities of government work. That doesnt mean government agencies arent turning to AI. They cannot hire their way to capacity, so theyre looking to technology to lighten the load. More than half of local governments report difficulty filling positions, a problem especially potent in larger metros. San Franciscos local government, for example, has more than 4,700 open positions. Since 2020, state government employment has increased, but much of that is a bounce-back from the pandemic, not true growth needed to deliver services with the efficacy governments want. But drop-in chatbots cant make a significant impact on operations because data within government agenciesand even within individual departments in agenciesis exceedingly siloed. State and local governments are managing budget constraints. IT teams are stretched thin. Its no surprise, then, that consumer AI tools dont meet their promise in government institutions. They fundamentally lack all the information they need to be effective in a public service context. THE TOOL GAP Commercial software tools, including AI chatbots, are built for private companies with hierarchies, contracts, and linear processes. Government work is inherently different. Public institutions are cross-organizational, the work is omnidirectional, and success necessitates constant collaboration across agencies, nonprofits, and community partners. Emergency management departments, for example, must identify points of contact within local police departments, fire departments, sheriffs offices, emergency medical services, utility companies, FEMA regional offices, and community emergency response teams to effectively deliver their servicecoordinating disaster response and recovery operations. The sum of these problemsfrom data siloes to budget constraints to technological roadblocksis that consumer AI struggles in government institutions because these tools lack the necessary context. Try asking ChatGPT Provide our current reimbursement process or Create a survey to gather feedback on the latest heat season coordination. These are tasks that require explicit, non-public knowledge. To execute such tasks, AI needs not only access to data that lives across disparate systems, but also governance and rules specifying which definition is best suited for each purpose. And even if you get a good answer, traditional AI is not built to help users know what to do next. THE PATH FORWARD Embedding AI is the path forward to deploy AI in government, effectively overcoming data silos to tackle inter-organizational work. Embeddedness refers to AI that lives directly within the platforms where work happens, within coordination, memory, and decision-making systemsnot inside a chatbot. Government is uniquely suited to benefit from AI thats truly embedded because it has the perfect raw material to make AI maximally useful: conversations, decisions, workflows, institutional memory, and loads of information. In other words, government has context. Unfortunately, most AI chatbots today assume their users work inside of a single organization, and therefore only need context from one organizations systems. For government, thats not the reality. A homelessness coordinator in Essex County or an election administrator in New York isn’t just working at one organization: they’re juggling relationships, meetings, decisions, and shared knowledge across constantly shifting agencies, nonprofits, contractors, and community partners. The hardest parts are aligning, coordinating, remembering, onboarding, and maintaining shared understanding across people who come and go. Because government work is inherently lateral, true embedded AI has information not only across one organizations systems but also across its partners systems, too. Taking the idea of embeddedness one step further, its vital for AI to seemingly disappear into public servants workflows. If AI is one more tool, one more thing government employees must be trained on, then AI is notembedded in the way it needs to be. Public servants dont want or need another new widget. They need technology that helps them do what they do faster, better, and more accurately. That is embedded AI. Consider this example: Its common for certain AI tools to send a summary and action items after a meeting. But embedded AI goes further. It would ask the user if they wanted a follow up email to socialize action items. It could draft the follow-up email, too. Then, after a couple of days, the embedded AI would surface engagement data, showing that someone assigned an action item hasnt read the follow-up email, and the AI would ask the user if they want a follow-up email, and then draft the note. When a public servant is searching for information, the next step is usually to read it to send something to somebody or take an action. AI that supports that next step without explicit prompting or forcing the user to switch tools is the kind of technology that can help public servants better deliver services more quickly. This is the shift that accelerates action. THE END GOAL Its vital we do not lose sight of the goal. State and local governments are where the rubber meets the road, turning rules into real servicesfrom handling daily operations to helping low-income people get nutrition assistance, providing veterans services, supporting people experiencing homelessness, and everything in between. Yes, chatbots and similar tools can help one person be more effective. But when AI is embedded, benefits are magnified; people and entire programs are faster and more effective. That means the people who rely upon municipal government services are better served. And that is the ultimate promise of technology, like embedded AI efficiently deployed in governmentbetter communities for all. Madeleine Smith is the CEO and cofounder of Civic Roundtable.
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E-Commerce
For years, retail investors were dismissed by some on Wall Street as “dumb money.”That typically referred to those prone to trading on hype, or chasing trends rather than company or industry fundamentals, or responding late to big market moves.That’s no longer the case. An analysis of where retail investors put their money last year shows they outperformed two of the most popular, professionally managed index funds, SPY and QQQ, whose goal is to mirror the performance of the S&P 500 and Nasdaq 100, respectively.Retail investors accounted for $5.4 trillion in trading activity in 2025 across stocks and exchange-traded funds, or ETFs, according to Vanda, an independent data and research firm. That’s a nearly 47% increase from the previous year and the most going back to at least 2014.“I personally want to dispel the myth of retail being dumb money, because it’s not dumb money anymore,” said Joe Mazzola, head trading and derivatives strategist at Charles Schwab, at an investor education event held in Anaheim, California, last November that drew around 800 of the financial services company’s clients.Many Americans have long invested in the stock market, although largely hands-off through managed funds in retirement plans, such as a 401(k). But over the last decade, the advent of mobile trading apps, zero-commission trading, stock market-focused communities on social media and online tools for education and research has helped usher in a new era of do-it-yourself trading in stocks, crypto and other investments.The COVID-19 lockdowns were an inflection point. A new crop of investors, many young newcomers using investing apps like Robinhood, helped drive the “meme stock” frenzy that catapulted the price of GameStop, AMC Entertainment and other stocks.Meme stocks aside, years of mostly uninterrupted, strong stock market gains provided an attractive backdrop for more people to take up investing. The benchmark S&P 500 has posted an annual loss only three times going back to 2015.By early last year, the number of people moving money from checking accounts to investment accounts reached its highest levels since 2021, according to a report by JPMorgan Chase. Some may have been younger Americans who couldn’t afford to buy a house and instead put the money in stocks, the report suggests.All told, money coming into the market from individual investors jumped about 50% from 2023 to early 2025, according to the report.“I would say they are considerably more important as a force in markets right now,” said Steve Sosnick, chief strategist at Interactive Brokers. “Markets used to be really dominated by institutional investors, but if you put enough ants together, they can move a very big log.” Buying the dip Frank Sabia from Encino, California, started dabbling in investing in 2018. Over the years, he’s leveled up his market and trading knowledge by joining private investor chat groups online or attending investing seminars like Schwab’s.“I learned a lot more about options strategies and charting and everything from there,” he said in an interview in November. “Now I’m independent. I just look for my own trades. I have my own strategy. I hunt on my own.”Sabia, a high school registrar, said he trades in cryptocurrencies and other assets, but that his “bread and butter” is options trading.That involves trading contracts to buy or sell a stock at a specific price before a specified date. This can be less costly upfront than buying stocks, but can also be riskier, because options expire and a small move in a stock’s price can translate into a big swing in the value of options contracts.Last April, Sabia opened a Roth IRA account and bought into the market as stocks tanked after President Donald Trump announced a sweeping set of tariffs that were more severe than investors expected. The announcement sent the S&P 500 into a two-day tailspin of more than 10%, the type of plunge not seen since the 2020 COVID crash.“I just bought the dip,” Sabia said.He was wasn’t alone. Retail investors seized on the market skid, buying more than $5 billion in stocks over the two days, according to Vanda.“In April, it was retail (investors) that bought the dip,” Mazzola said. “They were the ones that were willing to step in front. They saw the opportunity.”Retail investors also had one of their biggest buy-the-dip days of the year on Oct. 10, when the market dropped 2.7% after Trump threatened a “massive increase on tariffs” on China. The AI trade and silver Retail investors haven’t slowed down this year. Their trading activity hit an all-time high on a rolling monthly basis last month, according to J.P. Morgan. They were particularly active in the last week of January, coinciding with the S&P 500 climbing to an all-time high.Retail traders also had a hand in turbocharging the price of silver last month to record highs by buying a record amount of silver ETFs, according to data from Vanda.A recent analysis by Charles Schwab of trading and stock positions by its millions of retail investor clients found they were net buyers of stocks in January, with Microsoft, Netflix and Tesla among the most popular stock buys. Some take on more risk Many retail investors have gone beyond stocks or ETFs and into other investment vehicles. Options trading, which can expose them to higher risk, accounted for about $650 billion of retail investors’ trading last year and has been mostly rising steadily going back to at least 2019, according to Vanda.Noah Goodwin, a junior in high school in the L.A. suburb of Castaic, started options trading on Robinhood Markets early last year using in his mother’s custodial account. It paid off right away.He bought $148 worth of Nvidia options on Jan. 20, 2025, the same day shares of the tech giant plunged on news of AI advances by Chinese startup DeepSeek.Goodwin sold his options later that day.“I made a $200 profit. My very first trade!” Goodwin said in an interview in November.Not all his trades have gone his way. In July, he thought he could capitalize on market volatility caused by more uncertainty over tariffs, but he miscalculated.“I lost a lot of money, like probably like around $600 to $800,” he said. “So, a horrible month for me.”“For the most part, with only some exceptions, buying the dip has tended to be a very profitable tactic for many retail investors,” said Sosnick. But he cautioned that the strategy had led to retail investors making trading decisions without giving full consideration to the risks and rewards.“The risk to it is that for many of them it’s become sort of mechanical,” he said. Balancing short-term and long-term trading It’s not uncommon for retail investors to strike a balance between higher-risk moves and making trades to build out a long-term investment portfolio.Andy Hu, a financial analyst in Los Angeles who attended the Schwab event in November, said he had 50% of his investment portfolio in the SPDR S&P 500 ETF Trust, a popular fund that aims to track the performance of the S&P 500.For his short-term trades, he tends to buy micro-cap stocks, which are very small publicly traded companies that can see big swings in price because of small trading volume.The approach had his active trading account up by around 20% through the first 11 months of last year, he said.Hu stopped making trades toward the end of last year when a pullback in big tech companies helped drag the S&P 500 to a monthly loss in December, clouding sentiment on Wall Street.“I haven’t made a single trade in the last two months,” Hu said. Alex Veiga, AP Business Writer
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E-Commerce
The American promise is one of equal opportunity, but in most of our communities today, access to the resources that enable prosperity are too far out of reach. Thats because there is one unseen factor that influences who is able to thrive and who cannot: capital. The flow of capital into communities has a dramatic effect on which kind of people can open small businesses, buy homes, and generally participate in the American Dream. Places that are already thriving are able to easily access capital. Banks see these neighborhoods as a safe bet and will readily support the opening of new businesses, construction of new homes, and mortgage lending. But those places that are strugglingand have been strugglingdo not receive the same treatment. These are the inner-city neighborhoods, the rural communities, and the suburban areas that have been abandoned. There are some capital options for these under-resourced communities. Nonprofit and community banks offer concessionary loans, and government grants help fill gaps. For example, the Bipartisan Infrastructure Law helped drive $28.3 billion in federal grants to over 1,500 cities, according to the National League of Cities. But this is not enough. We need a different way to think about capital to drive the prosperity that has been out of reach for too many for too long. THE 3 TYPES OF CAPITAL Decades of redlining, exclusionary lending, and the uneven distribution of government funds have created entrenched divisions in American communities. Despite legal reforms, barriers to capital still persist, including higher burdens for lending placed on marginalized groups, discrimination against those groups, and capital providers simply not showing up for these places. Over 12 million Americans live in a banking desert, with no bank close by. These deserts are rural and urban, but also overwhelmingly suburban: two thirds of banking deserts are in suburban areas. Overcoming these barriers is not as simple as getting more money out to communities that need it. Communities need ways to not only absorb the capital, but use it. Offering money is not enough; the dollars must be combined with expertise and knowledge to help get it to the people who actually need it. At Living Cities, we have identified three different types of capital that lead to prosperity: 1. Financial capital: Funds, credit, and investment needed to start businesses, buy homes, and generally support community growth. Systemic gaps in creditworthiness, collateral requirements, and bias in financing limit the spread of financial capital. 2. Social capital: Networks of trust, mentorship, and informal connections that open doors to opportunity. Research shows social capital is strongly associated with upward mobility and improved economic outcomes, with limited networks leading to lower rates of entrepreneurship and employment. Not all communities have equal access. Decades of segregation and underinvestment have eroded social infrastructure in marginalized neighborhoods. 3. Knowledge capital: Information, skills, and know-how required to navigate business, government, and civic systems. When you have financial capital, but lack knowledge of regulatory systems, market trends, and grant opportunities, the capital cant get to where it’s most needed and most effective. Knowledge capital is a multiplier: pairing capital with business training or legal literacy increases success rates for entrepreneurs. THE CAPITAL EQUATION IN ACTION Only when all three types of capital come together can the cycle of exclusion be broken. Offering only one isnt enough. For example, small business programs that blend loans (financial), local business incubators (social), and technical training (knowledge) see higher success rates than those providing only cash infusions. Our Breaking Barriers to Business cohort is leveraging all three types of capital to create and execute projects that create jobs through hands-on small business assistance. Cities should audit procurement, zoning, and economic development policies to identify the gaps in all types of capital access, not only financial capital. Any federal and philanthropic interventions should require grantees to demonstrate not only financial investment but strategies for bridging social and knowledge capital divides. TOWARD INCLUSIVE GROWTH Equitable capital flow is about more than headline numbers. Its about shifting the deeper patterns that determine who gets to build the future. By understanding and reshaping capital flows, cities can fire up new engines of shared prosperity. Joe Scantlebury is president and CEO of Living Cities.
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E-Commerce
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