With states already putting forward over 1,600 AI-related proposals this year, startups are scrambling to understand which proposals might have legs and what they will mean for their companies.

In every corner of the economy, there is a flourishing ecosystem of startups building AI, building with AI, and using AI to better everyday tasks. Some startups are building their own machine learning models to perform specific tasks. Most startups, though, are leveraging foundation models—either by licensing from market leaders or accessing open source—to fine-tune and build unique products.