The Big Story: Lawmakers discuss AI regulation and role in economy
Across the capitol, members of Congress spent the week discussing how AI should be regulated and the impact it’s having on essential parts of the U.S. economy. Lawmakers on key committees explored the role of AI in financial markets and the impact of AI on the U.S. workforce, while President Donald Trump’s top science and technology policy advisor defended the administration’s AI Action Plan and previewed next steps on reducing domestic barriers for innovation and helping U.S. AI companies compete globally.
During a hearing held by the House Science, Space, and Technology subcommittee on research and technology, Michael Kratsios—the Director of the Office of Science and Technology Policy—outlined the administration’s AI Action Plan and its focus on promoting U.S. leadership in AI. A core pillar of the plan is to identify and challenge state AI laws, which touches on the often contentious debate in Congress about whether and how to preempt state laws governing technology issues, including AI. Kratsios stressed the need for a federal AI framework to provide clarity and consistency, instead of the growing patchwork of divergent state laws that can create duplicative compliance costs for startups on bootstrap budgets. Kratsios told lawmakers that he and other members of the Trump administration would be working with Congress “over the next weeks and months” to craft a federal framework. He also highlighted efforts to export American products that work together when deploying AI: “We have the very best chips, we have the very best models, and we have the very best applications…and we should be doing everything we possibly can to get that stack in the hands of our partners and allies.”
Also this week, members of the House Financial Services subcommittee discussed how to balance regulations so that new companies could innovate with AI and compete with incumbents while also maintaining sufficient consumer protections. And the Education and Workforce Committee held the first in a series of hearings on the impact of AI on America’s workforce and education system. This week’s hearing focused on how AI can be used to educate and train workers as opposed to replacing them. Given the wide range of policy issues that will impact startups’ ability to access and succeed in the AI ecosystem, policymakers must continue to explore the intersection of AI and industry-specific regulations, trade policy, workforce issues, and much more.
Policy Roundup:
State Department pauses visa processing for 75 countries. The State Department reportedly paused visa processing for dozens of countries—including Egypt, Brazil, and Nigeria—claiming that immigrants from those countries “take welfare from the American people at unacceptable rates.” The move is the administration’s latest in a long line of efforts to make the U.S. less accessible to immigrants, including foreign-born talent that contributes to the startup ecosystem. The immigration system should expand—rather than narrow—clear, predictable, and accessible pathways for founders and skilled workers who drive innovation and job creation in the U.S.
FCC Chair hints at high-cost fund changes. During a Federal Communications Commission (FCC) oversight hearing this week, FCC Chair Brendan Carr said the agency will be looking at potential changes to the high-cost fund, the part of the agency’s Universal Service Fund focused on building out broadband access in rural and other hard-to-reach areas. Carr’s comments come as members of the bipartisan, bicameral Universal Service Fund working group prepare legislation to reform the program. As policymakers continue evaluating changes to connectivity programs, it is critical to consider how changes could impact startups, their employees, and their users.
Trump nominates WeatherTech founder for FTC spot. On Tuesday, President Donald Trump nominated David MacNeil, a Republican donor and founder of an automotive accessories company, to serve on the Federal Trade Commission. If confirmed, the new commissioner would help shape several areas impacting startups, including consumer protection, data privacy, and competition.
Lawsuit challenges DHS rule ending automatic work permit extensions. Spouses of H-1B visa holders challenged the Department of Homeland Security’s rule eliminating automatic Employment Authorization Document renewal extensions, a policy that would force tens of thousands of authorized workers out of the U.S. talent pipeline. Engine has warned that ending automatic extensions would create harmful work interruptions for high-skilled immigrant talent that help fuel the startup ecosystem, shrinking an already limited talent pool and undermining U.S. competitiveness.
USPTO launches new program to support standard-essential patents. The U.S. Patent and Trademark Office launched a pilot program this week to support small businesses looking to secure patents and enter standards development organizations. The program will address resource constraints that often prevent startups from obtaining standard-essential patents—which cover core parts of technical standards like Wi-Fi, Bluetooth, and 5G networks—and making technical contributions to standards development.
On the Horizon:
WED 01/21: The House Small Business Subcommittee on rural development, energy, and supply chains will convene a hearing to discuss how investment in innovation can support economic growth in rural communities at 10:00 AM ET.
THU 01/22: The House Science, Space, and Technology Committee will convene a hearing to assess U.S. leadership in quantum science and technology at 10:00 AM ET.
WED 01/28: The Federal Trade Commission will host a workshop to discuss a range of issues related to age verification and estimation technologies at 9:00 AM ET.
THU 01/29: The Federal Communications Commission will convene an open commission meeting to discuss expanding unlicensed spectrum at 10:30 AM ET.
Startup Roundup:
#StartupsEverywhere: Raleigh, N.C. Atlas CEO and co-founder Michael Hoy is no stranger to the entrepreneurship ecosystem. After founding two companies and joining an early-stage startup, he developed a deep passion for the startup journey. Using his lived experience, he launched Atlas to help SaaS and AI companies find their product-market-price fit. We had the opportunity to chat with him about his journey, regulatory obstacles, their intellectual property strategy, and more.
