The Big Story: Openness in AI beneficial for startups, innovation
This week, the National Telecommunications and Information Administration finished soliciting public input on openness in AI for a study that could impact the availability and utility of open source AI. The agency is examining the benefits and risks of open AI systems and widely available model weights. Engine weighed in to share how openness in AI reduces barriers for startups and to highlight how startups are innovating with open models. Engine also joined a coalition of nearly 50 academic and civil society groups underscoring the benefits of open source AI for innovation, research, and transparency. The study and resulting recommendations could have significant impacts on the competitiveness of the AI ecosystem, and policymakers should seek to maximize the benefits of openness in AI.
The study of openness in AI was prompted by President Biden’s fall executive order, which tasked the agency with studying the impacts of widely available model weights, in particular. Model weights reflect what the model has learned during the training process and dictate how the model behaves. Access to model weights means you can innovate with the model without having to train your own. This is critical to lowering barriers for startups because the computing power associated with model training is the primary cost center in AI. Meanwhile, some in the national security community, for example, are concerned that bad actors will be able to exploit openness in AI to nefarious ends. However, restrictions on domestic openness in AI will harm U.S. competitiveness and is not the right approach to resolving this concern because other countries will continue to have open models.
Startups are key stakeholders in AI policymaking, benefitting society by using and developing AI in nearly every industry. Open source software brought down the cost of starting a software company by orders of magnitude, and openness in AI is poised to do the same for AI innovation. Policymakers should avoid favoring one type of AI system over another and should pursue policy responses that can address risks while enhancing the benefits of openness in AI.
Policy Roundup:
Annual trade report shows apathy to address barriers encountered by U.S. startups. Today, the U.S. Trade Representative released the National Trade Estimate, a report to Congress detailing foreign trade barriers encountered by U.S. companies, which lacks focus on digital trade barriers encountered by startups. In announcing the report in prior years, the agency had underscored digital trade barriers, but that is absent from this year’s announcement. Engine earlier shared how digital trade barriers across more than a dozen jurisdictions are negatively impacting U.S. startups in comments to the agency, and last month a coalition of startups wrote to trade policymakers calling on them to support startups by advancing strong digital trade policy. The de-emphasis of these barriers underscores the continued backsliding of U.S. leadership on digital trade.
Invest in women entrepreneurs to ignite innovation. As Women’s History Month comes to a close and discussions to expand the Child Tax Credit continue, it is essential to recognize the invaluable contributions of women entrepreneurs now, and year round. In a new blog post this week, Margot Lee Schmorak, CEO and Co-founder of Hostfully and Co-founder of VC Backed Moms, delves into the unique challenges faced by mothers in the startup ecosystem. Margot underscores the importance of governmental policies that support women founders including pregnancy and motherhood, while advocating for initiatives such as an expanded Child Tax Credit.
Nebraska joins list of states considering digital taxes. On Wednesday, Nebraska lawmakers discussed a bill that includes a measure to raise revenue by taxing digital advertising. Digital ad taxes are being pursued in multiple states, most notably in Maryland, where the effort continues to face legal challenges. These taxes stand to pose harm to the startup ecosystem because although they primarily target large tech companies, they will result in downstream harms through the form of increased costs for services. Startups heavily depend on digital services, including advertising, offered by these platforms. Increased costs will have a disproportionate effect on cash-strapped startups and could significantly harm startup growth and innovation.
Senate Democrats urge President Biden to support DACA recipients. This week, U.S. Senate Majority Whip Dick Durbin (D-Ill.) and 19 Senate Democrats called for President Biden to take executive action to provide relief for undocumented immigrants, including DACA recipients. DACA recipients are critical contributors to the startup ecosystem, both as founders and employees, and help to drive innovation throughout the country. Engine has repeatedly emphasized the positive impact of immigrants and it's crucial for policymakers to act to provide a permanent pathway for those with DACA status.
State data privacy law patchwork continues to grow amid federal inaction. This week, the Kentucky legislature passed a data privacy law, becoming the latest state with its own consumer data privacy rules. The law, which passed with unanimous votes in both chambers, is expected to be signed by the governor and largely follows Virginia’s data privacy statute, the Virginia Consumer Data Protection Act. With progress on comprehensive data privacy idle in Congress, states have continued to enact their own laws, leaving startups to contend with a patchwork of rules that continues to evolve.
Startup Roundup:
#StartupsEverywhere: Indianapolis, Indiana. MITO Materials Solutions founding team believes improvements to materials can ultimately improve quality of life. The company is creating additives that improve the durability and toughness of legacy industrial materials, giving manufacturers the ability to make lighter and stronger products. We talked to Co-founder and CEO Haley Marie Keith about her journey from the university to entrepreneurship pipeline, inequities and challenges facing women founders, and the pros and cons of working with government programs.
