As artificial intelligence begins to play a bigger role in how companies conduct their most important tasks, small businesses are looking at how the technology can help boost their growth and productivity. 

Small business leaders view AI as a key tool for helping move their ventures into the future. At the same time, Washington is starting to explore the potential benefits and risks of AI and what policymakers can do to help small businesses responsibly deploy the technology.

We look at how Congress, the Biden administration and business leaders are working to provide clarity and support for entrepreneurs using the quickly-evolving technology.

Be sure to listen to our accompanying podcast as we dissect the issue and check out the rest of our AI Impact series here.

Current State of Play in Washington

So far, the White House is ahead of Congress on AI policy, encouraging innovation and competition among small businesses using the technology.

In October, President Joe Biden issued an executive order establishing new safety standards for AI use. That order included stipulations aimed at helping small businesses understand AI better. Part of that effort revolves around offering technical assistance to small entrepreneurs and developers as they increase their use of machine learning technology. 

Additionally, the administration has offered research grants to small businesses looking to foster innovation in AI. In March, the U.S. Army — through its Small Business Innovation Research program — also invested $50 million in more than two dozen small and non-traditional businesses to develop AI and machine learning solutions.

On the Hill: Congress is still in the early stages of learning more about AI and how policymakers can support the use of the technology while putting in place necessary measures to prevent its misuse.

Rep. Dan Meuser (R-Pa.), who sits on the House Small Business Committee, told us lawmakers are assessing the relationship between small companies and AI, which they consider “a major tool for businesses.”

Despite the growing congressional interest, AI legislation specifically targeting small businesses is still a long way from getting a floor vote.

Todd McCracken, president of the National Small Business Association, told us he hopes that changes soon.

“Most of what is happening in the AI space for our policy sector doesn’t really seem to have a significant impact on the way small businesses are planning to use it,” McCracken told us. “I do think this will become central over the years to a lot of small business operations, and the way AI gets shaped and regulated is very important.”

Fairness concerns: As more state and federal agencies automate their correspondence with small businesses, lawmakers are concerned about the implications. They worry about the potential for AI to generate false information. Lawmakers are also concerned about racial and other biases based on the information used to train the AI tainting the correspondence between small businesses and government agencies.  

House Small Business Committee Ranking Member Nydia Velázquez (D-N.Y.) has called on the White House to investigate how effective and accurate AI bots are in helping small businesses communicate with government agencies. 

“As generative AI tools such as chatbots and image generators proliferate and enter mainstream use, this work is becoming increasingly important in ensuring fairness and a level playing field for everyday Americans, especially the hardworking small business owners that power our economy,” Velázquez and several other lawmakers wrote in a letter to the White House in December.

Over in the Senate, lawmakers have introduced a handful of bills that aim to enhance consumer privacy and regulate how AI systems are used in the business world.

We’ll have more on that below.

The Spotlight Interview: SBA Administrator Isabel Guzman

As administrator of the Small Business Administration, Isabel Guzman is leading the Biden administration’s efforts to help small businesses grow and embrace the increasing technological options available to them.  

Under Guzman, the SBA has embraced AI as an important tool for small entrepreneurs. She told us AI is helping small businesses improve their operations – including functions like marketing, content creation and customer service – across several industries like biotech, energy and health care.

Guzman said she hopes to see a lot of innovation in the next five to 10 years with small businesses being able to expand, grow and enter new markets with the power of AI behind them.

In the meantime, the SBA administrator is keeping close tabs on new legislation that would impact small businesses. Guzman told us she tries to stay engaged with key players to make sure the SBA has a voice at the table.

Guzman’s remarks have been edited for brevity and clarity.

The Policy Pipeline

Small businesses are a key driver of economic growth and employment. Many are vendors and contractors for the government and also depend on federal and state agencies for funding and support. That means they’d be directly impacted by whichever regulatory approach Congress and federal policymakers take. 

There are dozens of bills related to AI in both the House and the Senate, although just a handful specifically address small businesses.

Sen. Ron Wyden (D-Ore.) introduced a bill in September that would direct the Federal Trade Commission to require “impact assessments” of how automated systems are used to make critical decisions like the cost of health care and housing.

Essentially, this legislation would require certain businesses that use AI tools to make those decisions and then report on how the results are affecting consumers. So far, the bill has 11 Democratic co-sponsors and no Republicans. 

That bill, like others on AI, faces an uncertain future in a Congress that’s dealing with issues including funding foreign aid and addressing the southern border. 

Consumer consent: As more businesses use AI, policymakers are concerned about how consumer data is used and how their privacy is protected.

For instance, Sens. Peter Welch (D-Vt.) and Ben Ray Luján (D-N.M.) are pushing legislation that would require companies to request consent from consumers before using their personal data to train AI systems. Like Wyden’s bill, there’s not been significant action on this one either.

There’s generally bipartisan support in Congress for anything that shores up small business, so such companies will likely benefit from favorable AI legislation when Congress gets around to it.

In the meantime, lawmakers have acknowledged that AI is a complicated issue to understand even for them and that legislation would require input from several committees. That would include the small business panels. 

– Mica Soellner