The Big Story: Engine releases pro-startup policy agenda on AI
In a policy agenda out this week, Engine is advocating for policies across a sweeping range of issues to help bolster startups’ accessibility to the AI ecosystem. This comes as the Office of Science and Technology Policy (OSTP) is soliciting input on a forthcoming “AI Action Plan” to guide the administration’s work to advance AI innovation and competitiveness in the U.S. The plan should encapsulate a range of policy issues that impact the ability of startups to participate in the AI ecosystem.
A broad set of policies will determine whether startups can enter the AI ecosystem, shaping their ability to leverage funding and talent. Policymakers can help startups access the capital they need by expanding investor pools, preserving pathways for startup exits, making government acquisition processes more accessible, and strengthening government grant programs—such as Small Business Innovation Research grants. Tax policy—including restoring immediate expensing of R&D costs and creating incentives for angel investors—can also help AI startups attract and keep capital. And a strong AI talent pipeline is crucial for maintaining U.S. leadership in the space; policymakers should invest in AI skilling and upskilling programs, strengthen STEM education, and reform immigration pathways—such as the H-1B and O-1 programs—to attract and retain global talent.
Determining how startups access talent, capital, and resources will influence who can enter the AI ecosystem, but a broader set of policies will ultimately determine who can succeed in it. Overly broad, imprecise rules and patchworks of varying or conflicting rules will force startups to spend their limited capital on compliance. Data is fundamental for startups building AI, and access to that data is often shaped by privacy rules, intellectual property frameworks, and the government's willingness to make its own data available. Additionally, policy should recognize that foundation models have a wide range of applications, and if liability is incorrectly assigned to model developers—rather than users misusing the technology—it will create strong disincentives to offer the tools that many startups build off of.
Policymakers have long debated AI, but they must fully grasp the breadth of the ecosystem to craft policies that will shape its growth and impact. The OSTP’s request for input presents a crucial opportunity to build a comprehensive AI Agenda that reflects the needs of innovators.
Policy Roundup:
Trump imposes, partially walks back tariffs, inviting retaliation and creating uncertainty. Last week, President Trump allowed 25 percent tariffs on Mexico and Canada to go into effect, and imposed an additional 10 percent tax on imports from China, which were partially walked back later in the week. Using broad tariffs as a policy tool undermines international cooperation and increases costs, invites retaliation, and creates uncertainty that harms U.S. startups. Instead, the administration should work with international partners and pursue a positive trade agenda to reduce barriers for U.S. startups, as we and 35 other organizations highlighted in a recent letter to newly installed U.S. Trade Representative Jamieson Greer.
President Trump proposes 'Gold Card' as new immigration pathway. President Donald Trump raised an alternative immigration pathway in his address to Congress last Tuesday, proposing a new “gold card” green card pathway which would allow individuals to apply for permanent residency for a fee of $5 million. The pathway of the proposal remains unclear absent congressional action. While much of the administration’s early actions have centered on the border and removals, the administration has signaled a willingness to address talent needs and high-skilled immigration.
Treasury suspends enforcement of beneficial ownership reporting. The U.S. Treasury Department announced it would not enforce the Corporate Transparency Act, a law that requires companies to divulge beneficial ownership information to the government. This decision will positively impact startups, which face barriers in adapting to new regulations and managing burdensome compliance costs.
President Trump calls to end CHIPS Act, putting Tech Hubs at risk. In a joint address to Congress last Tuesday, President Donald Trump called for the end of the bipartisan CHIPS and Science Act, which included up to $500 million in funding for the Regional Technology and Innovation Hubs program. The program aims to develop regional startup ecosystems and has been underfunded since its inception. Engine has long advocated for its implementation and policies that support startup ecosystems across the country.
Trumps push bill to remove online content. Last week, President Donald Trump and First Lady Melania Trump advocated for a bill that would require Internet platforms to remove any content reported as nonconsensual intimate imagery. While the bill's admirable goal is to remove harmful content, civil liberties and technology advocates warn that it lacks sufficient guardrails against abuse and will harm free expression and tools that protect Internet users’ security, like encryption.
On the Horizon
TUE. 3/11: The House Small Business subcommittee on oversight, investigations and regulations will convene a hearing on the U.S. Small Business Administration at 10:00 AM ET.
TUE. 3/11: The House Homeland Security subcommittee on cybersecurity and infrastructure protection will convene a hearing on cybersecurity regulation at 10:00 AM ET.
TUE. 3/11: The Senate Judiciary subcommittee on crime and counterterrorism will convene for a hearing to discuss legislation aimed at keeping kids safe online at 2:30 PM ET.
TUE. 3/18: The California State Assembly Committee on Privacy and Consumer Protection will convene for a hearing to discuss the AI Copyright Transparency Act at 1:30 PM PT.
Startup Roundup:
#StartupsEverywhere: Minnetonka, Minnesota. The science of reproduction is critical to family planning. As infertility rates increase, there is a greater need for effective diagnostic testing to ensure viable pregnancies. Enter Dr. Serhii Zatsarynin, his fellow Ukrainian founders, and their product, Ovul–a reusable digital microscope and cloud-based AI to test for ovulation. We sat down with Serhii to discuss his product, his experience immigrating to the U.S., and the unique funding struggles facing FemTech.
