Big Story: AI Action Plan echoes startup priorities.
President Donald Trump released America’s AI Action Plan on Wednesday, aimed at boosting AI innovation by removing red tape, expanding AI infrastructure, and positioning America at the global forefront of AI. For startups—building AI, building with AI, and using AI to improve everyday tasks—this plan signals an awareness that AI innovation requires smart policies across a wide range of issues affecting startups developing and deploying AI.
The Action Plan is organized around three main pillars, each of which aligns with themes Engine has long championed. The first pillar, accelerating innovation, emphasizes the importance of streamlining regulatory burdens, boosting compute access, and supporting open source.. That’s a welcome shift away from a patchwork of state laws that undermines startups’ competitiveness by saddling them with tens of thousands in duplicate costs. Reducing costs to innovate and succeed are longstanding priorities for startups, which have few resources as they get off the ground—the average seed-stage startup has about $55,000 to cover all of its monthly expenses. The second pillar focuses on strengthening AI infrastructure by building data centers and training more skilled talent. Expanding infrastructure and talent capacity will help bring down costs and increase access for early-stage companies building and training AI models. The third pillar aims to solidify U.S. leadership in AI globally by supporting the export of American AI technologies to allies and by ensuring U.S. leadership in global standard setting bodies. U.S. involvement in setting global standards will help to ensure U.S. AI startups are competitive abroad.
The AI Action Plan is a promising starting point for a policy framework that supports startup innovation. Successfully meeting the goals laid out in the action plan will require policymakers to develop policy frameworks that address the full range of issues AI startups face.
Policy Roundup:
Measures advanced to help emerging funds. The House Financial Services Committee advanced three bills this week, including the Developing and Empowering our Aspiring Leaders Act, the Improving Capital Allocation for Newcomers Act, and the Small Business Investor Capital Access Act. Together, these measures aim to help small and emerging venture capital funds attract investors, reduce compliance costs, and strengthen the regional funding ecosystem, improving capital access for founders outside traditional hubs.
Senate explores portable benefits, independent contractors. Engine submitted comments to the Senate Committee on Health, Education, Labor & Pensions following a recent hearing on independent contractors and portable benefits. The hearing examined measures to modernize the independent contractor definition and create a portable benefits system that better reflects the modern workforce. Early stage startups often rely on independent contractors, as they have variable employment needs and insufficient capital to hire full time employees, in part due to the cost of employee benefits. In addition to supporting independent contractors, portable benefits can also encourage greater participation in the startup ecosystem, as a lack of healthcare and retirement benefits can discourage would-be startup founders and early employees.
Senate moves on Trump nominees. The Senate Finance Committee advanced the nomination of Joseph Barloon for Deputy U.S. Trade Representative and U.S. Ambassador to the World Trade Organization on Tuesday, while the Senate confirmed Arielle Roth by a 52–42 vote to lead the National Telecommunications and Information Administration on Wednesday. As the new administration’s leadership and policies take shape, it’s critical they prioritize the needs of the startup ecosystem in trade, broadband, and AI policy.
Telecom agency plans to eliminate key benchmarks. Federal Communications Commission Chair Brendan Carr plans to eliminate the agency’s broadband speed goal of 1 Gigabit per second. Carr’s proposal would make it easier for Internet service providers and the agency to claim nationwide broadband progress even if service and quality remain limited, which creates challenges for startups that rely on fast, reliable, connectivity to reach users.
Trump announces trade deals with Asian partners. President Trump announced new “trade deals” with the Phillipines, Indonesia, and Japan on Truth Social Tuesday, as his imposed August 1 deadline for increased tariffs nears. Details of the deals were mixed—with terms of the Philippines deal apparently still being negotiated and last minute changes to the Japanese deal. The White House published a joint statement with Indonesia outlining a framework for negotiation, which notably includes addressing digital trade barriers, like data flows and customs duties on electronic transmissions—key issues for startups. Startups need certainty and reliable access to global markets, which requires consistent, thoughtful trade policy.
On the Horizon:
WED 7/30: The Senate Committee on Banking, Housing, and Urban Affairs will convene a hearing to discuss AI’s influence on capital formation and insurance markets at 10:00 AM ET.
WED 7/30: The Senate Judiciary subcommittee on privacy, technology, and the law will convene a hearing to discuss online data protections and digital privacy at 2:30 PM ET.
Startup Roundup:
#StartupsEverywhere: Indianapolis, Indiana. The biotech industry is responsible for many modern discoveries. Yet, many scientists rely on outdated software to analyze their data. After spending years in biotech sales, Mitchell Castetter found a solution to the problem. He founded BioReact, a technology company dedicated to improving the data flow and infrastructure system for biotech companies. We sat down with Mitchell to discuss his company, AI, and the Indianapolis startup ecosystem.
