State AI patchwork takes shape
As lawmakers grapple with how policy will shape the future of artificial intelligence, state lawmakers are weighing state-specific rules, which will create a fragmented AI landscape that’s costly for startups to navigate. In New York, lawmakers are making an end-of-session push on the Responsible AI Safety and Education (RAISE) Act, which would regulate widely-used foundation models. Meanwhile, federal policymakers are debating a pause on state AI laws to prevent the state patchwork.
New York is the most recent state to consider AI legislation that could make it harder for startups to build their AI products. The RAISE Act would create audit and transparency requirements for large foundation models and their developers and smaller models that behave like foundation models, and the bill is targeted to models that meet certain computational and compute thresholds. The bill would also prohibit developers from releasing foundation models if they make it “substantially easier” for bad actors to inflict “critical harm,” creating liability for foundation model developers who can’t necessarily control what people do with the tools they build. While most startups are unlikely to be directly impacted by the bill, it could dramatically limit the availability of foundation models, which many AI startups use as a building block when they’re building their companies, given the significant cost barriers of building a foundation model from scratch.
As state lawmakers consider enacting new rules around AI, Congress is debating whether to halt the growing patchwork of state AI laws with a 10 year pause on state AI law enforcement. While House Republicans have pointed to the threat of a costly and complex patchwork—and its impact on U.S. innovation and competitiveness—to justify the House-passed moratorium, it has faced criticism from some lawmakers as well as skepticism that it can survive the Senate’s rules about budgetary procedures. Senate Republicans released text this week with their own version of the moratorium. With more than 1,000 AI-related bills introduced at the state level this year alone, the risk of a patchwork with redundant and burdensome compliance costs is growing. Policymakers should embrace a uniform, nationwide AI policy framework that enables startups to innovate, build companies, and compete across the country and around the world.
Policy Roundup:
House passes bills affecting access to SBA resources. The House passed several bills this week that would change how entrepreneurs access Small Business Administration (SBA) resources, including one that would prohibit SBA field offices from operating in sanctuary cities and one that would require applicants to verify their age and citizenship status in order to qualify for SBA loans. As Congress considers further changes to the SBA, it’s critical that policymakers protect access to capital—especially in underserved communities—and preserve the systems that help startups launch and grow.
Florida bill threatens startup talent. In a new op-ed, the Economic Innovation Group warns that a recently passed bill in Florida to expand noncompete agreements will hinder talent mobility and startup formation. Startups rely on the ability to hire and retain skilled workers, and policies like this make it harder for skilled talent to enter the startup ecosystem.
Caught in the crossfire of the competition cases. Antitrust cases are ramping up, but some proposed actions—including limiting investments and partnerships with startups—could make it harder for early-stage companies to secure funding, innovate with AI, or find viable exits. In a new blog post this week, we examine how antitrust enforcement actions can have downstream impacts on startup investment and activity.
Student visa shifts could limit startup talent. The Trump administration paused new interviews for student visa applicants and signaled plans to expand social media vetting for student visa applicants. For startups, policies that make it harder for international students to enter or stay in the country risk cutting off a vital pipeline of talent.
On the Horizon:
WED 06/11: The Senate Small Business and Entrepreneurship Committee will convene a hearing to discuss oversight and reform of the Small Business Administration’s disaster loan program at 2:30 PM ET.
Startup Roundup:
#StartupsEverywhere: San Francisco, California. It’s no secret that accessing prices for medical treatments in the United States can be murky and unclear. Beth Ann Lopez–through her company, Outfox Health–is using AI to make sense of massive raw data files empowering patients to compare and contrast the costs of hospital procedures with their insurance. We sat down with Beth to talk about her company, her experience as a startup founder in America and Vietnam, and AI regulations.
