The Big Story: U.S. moves forward on AI policy, resources for startups
This week, two federal entities released materials to bolster research and responsible development of Artificial Intelligence, which are or will be made available to startups. The National AI Research Resource Task Force released its final report to the president and Congress recommending the creation of a National AI Research Resource (NAIRR), and that startups be primary users of that resource. And the National Institute of Standards and Technology (NIST) released the Artificial Intelligence Risk Management Framework, a voluntary guide for companies—including startups—as they develop AI technologies. Both developments were spurred by the National AI Initiative Act of 2020 which passed as part of the National Defense Authorization Act that year.
The goal of NAIRR is to promote AI research by making it more equitable and accessible, and the president and Congress should work to implement the task force's recommendations to capitalize on this opportunity. As Engine and multiple startups said in comments to the NAIRR task force, developing AI products can be very expensive, pushing innovation in AI out of reach for some young startups that have few resources. Allowing direct access by startups to government AI resources will help lower these barriers. Other primary users of the NAIRR include students, universities, and researchers which stand to additionally support AI innovation by developing talent in this emerging field.
NIST’s AI Risk Management framework can help guide companies with a process to manage risks and maximize benefits as they develop their AI technologies. The voluntary framework was developed as a result of a long, collaborative process between public and private sectors, involving government, civil rights experts, technologists, tech companies, and other experts. The framework comes amid efforts to regulate AI worldwide that could significantly impact startup competitiveness globally and demonstrates an approach to AI policy that can promote innovation and ensure the benefits of AI are realized in technologies that are safe, responsible, and reliable. As policymakers across the government continue to consider AI, they need to keep the needs of startups in mind.
Policy Roundup:
New report outlines tech tools startups use to build their companies. This week, Engine and the Computer and Communications Industry Association released a new report highlighting various services and tools that make it possible to efficiently launch a startup. The report provides helpful context for many policy debates and shows that those services, often available to startups for free or little cost, have lowered barriers to entrepreneurship. The report release was accompanied by a panel featuring three startup founders discussing the tools they’ve used in their startup journey. The tools are critical for startups and as one of the founders, Sedale Turbovsky, Founder and CEO of OpenGrants, said, without them “you have fewer people building solutions and solving problems, [meaning] you're going to fix less things and miss out on some really cool innovation.”
FTC’s noncompete rule could boost startup talent pool. Earlier this month the Federal Trade Commission (FTC) issued a proposed rule to ban most noncompete agreements, finding that the post employment contracts amount to unfair competition under the FTC Act. As we wrote in a blog this week, banning noncompetes could catalyze talent mobility and spur startup formation and growth throughout the ecosystem. The proposed rule is open for public comment until March of this year.
Maryland Supreme Court set to hear digital advertising tax appeal. The Maryland Supreme Court has agreed to hear an appeal regarding the state’s tax on digital advertising after a Maryland judge struck down the tax last year, deeming it unconstitutional and a violation of the Internet Tax Freedom Act. Maryland’s tax on gross revenues from digital advertising services went into effect early last year, applying an excise tax to gross revenue from digital advertising, targeting large tech companies, including those that provide low-cost advertising and other services to end users like startups. Other states have also been following Maryland’s lead, with similar measures to tax e-commerce companies introduced in Connecticut, Indiana, Massachusetts, and New York. The Court will hear arguments in May and is expected to make a decision by the end of August.
Small business, government leaders join roundtable on capital access. This week, small business advocates and representatives from across the government held a roundtable to discuss ways to expand capital access for small businesses and startups. Participants explored ways to improve equitable capital access for underrepresented business owners and discussed proposed fixes to Small Business Administration lending rules that have created eligibility barriers for startups in the past.
Startup Roundup:
#StartupsEverywhere: Lander, Wyoming. Global Response Systems provides physicians, dentists, chiropractors, and urgent care clinics with HIPPA-compliant communications tools such as messaging solutions and secure file sharing. We sat down with CEO Joshua Denhardt to get a sense of his experience building a company headquartered in rural Wyoming, current interoperability between electronic medical record systems, and the importance of net neutrality for startups.
The importance of investing in Black women entrepreneurs. Carolyn Pitt—the Founder and CEO of Productions.com, a platform that advocates for and places diverse talent across studios and production companies—wrote an op-ed this week spotlighting the barriers Black women entrepreneurs face while navigating the startup ecosystem. Black women founders, despite leading as innovators and founding new businesses at a significant pace, are underfunded and under-resourced. They often receive less financing and face higher interest rates when securing capital, in addition to other hurdles ranging from student loan debt to caregiver responsibilities. Carolyn further outlines how integral it is to build diversity in the startup ecosystem and expand opportunities for diverse investors so that Black women founders can access the resources and financing they deserve.
