The Big Story: House advances AI legislation to authorize startup resources, boost AI workforce
This week, a key House committee advanced nine AI-related bills, several of which would provide AI resources for startups and grow the talent pool bolstering U.S. startup success. Policymakers should look for opportunities to advance the legislation in the limited time Congress has left this year. Several of the bills mirror those passed by the Senate Commerce Committee in July, making them potential contenders for inclusion in a must-pass legislative package later this year.
Among the bills advanced by the U.S. House Committee on Science, Space and Technology, the Creating Resources for Every American To Experiment with Artificial Intelligence Act of 2023 (CREATE AI Act) would fully authorize the National AI Research Resource (NAIRR), a program that would promote AI innovation by making data and compute resources available to eligible startups, researchers, and educational institutions. Previously, Engine—as well as individual startups—weighed in as the federal government formulated the NAIRR to guarantee that resources would be inspired by the needs of startups. The CREATE AI Act authorizes NAIRR—currently being run as a pilot program—to provide government AI resources and help to expand the talent pool.
Several of the bills advanced by the committee are explicitly designed to grow the AI workforce, including The LIFT AI Act, the NSF AI Education Act of 2024, and the Expanding AI Voices Act. The bills look to build AI talent at all levels and across communities, with efforts targeted to K-12 students, HBCU students, existing STEM talent and more. The committee also advanced the Small Business AI Advancement Act, which would push the National Institute of Standards and Technology to develop guidance for small businesses using AI. U.S. policymakers should pursue policies that enhances U.S. innovation within the AI ecosystem while avoiding unintended consequences to startups.
Policy Roundup:
Utah's age verification rule blocked by court. On Tuesday, a federal judge said a Utah law that requires all users to verify their age in order to engage with social media is likely unconstitutional. Several states have enacted similar measures requiring age verification—such mandates could burden startups and create risks for user privacy and security. For startups, requirements to determine user age risk significant setbacks and can harm constrained budgets, offer multiple cybersecurity risks, and ruin user experience.
Fearless Fund closes grant program for underrepresented entrepreneurs after yearlong discrimination lawsuit. The Fearless Fund—a venture capital firm that supports women entrepreneurs of color—settled a lawsuit over alleged discrimination in its $20,000 grant program by agreeing to close the program. This case is part of a broader wave of lawsuits blocking programs geared at helping minority business owners, which take the country further from an equitable startup ecosystem. Policymakers should work to ensure resources are accessible for all innovators, including those of color.
Digital replica bill puts startup innovation at risk. Engine joined a broad coalition of tech groups in a letter expressing concerns about a new bill that aims to regulate how AI content is created and shared. The bill, the Nurture Originals, Foster Art, and Keep Entertainment Safe Act, could open startups up to expensive litigation if their users create or share AI-generated content that violates the bill. Engine has explained that the bill goes too far in addressing possible misuses of digital replica technology—potentially inhibiting legitimate speech and creating harms to innovation.
Canada digital tax threatens North American trade for small businesses. This week, the Business Council of Canada expressed concern that Canada's digital services tax (DST) would be harmful to Canadian businesses, the economy, and its relationship with the U.S., ahead of the 2026 U.S.-Mexico-Canada trade agreement review. While the taxes are directed at larger companies, startups often rely on big tech companies for low cost digital services and would see increased costs as a result of DSTs. Engine has repeatedly urged policymakers to continue to work towards finalizing a global tax deal that prevents individual countries’ DSTs.
Report on European competitiveness highlights drawbacks of tech regulations. This week, the European Commission released a report examining business competitiveness and the regulatory environment in Europe. The report follows a deluge of tech focused regulations, like the General Data Protection Regulation, AI Act, and Digital Services Act, and underscores how over-regulation can stifle innovation and startup growth. The report also outlines the dangers of inconsistent rules about the same issue, which create additional costs for startups. While European policymakers should address the issues outlined in the report to improve startup success, the report also serves as a warning to U.S. policymakers as they consider tech policies here at home.
Startup Roundup:
#StartupsEverywhere: New York, New York. Constanza Gomez initially saw her interest in textile waste as just a hobby. However, that changed when she co-founded Sortile, a technology platform designed to identify textile types in order to facilitate recycling. We spoke with her about her passion for textile waste recycling, the difficulty securing public grant money, the role of AI, and the company’s future.
