AI for Startups

Artificial intelligence is the most consequential innovation we have seen in a generation, with the transformative power to address society’s most complex problems and create a whole new economy—much like what we saw with the advent of the printing press, electricity, and the internet.

It is a moment so big that it would be shortsighted for us to ignore the power of collaborating across the AI ecosystem—and the possibilities and potential that stand to be born from it. That is what brings us together—a shared understanding of what the stakes of this moment require and the role innovators big and small play in expanding opportunity and maintaining economic competitiveness. Our two firms believe that Little Tech and Big Tech can work successfully together, both to build a broader innovation ecosystem and collaborate on public policy initiatives.

Our two companies might not agree on everything, but this is not about our differences. It is about jointly recognizing that the policy choices—or missteps—we make now will determine whether the U.S. can continue our long and proud history of fostering innovation and seeing startups, small businesses, and entrepreneurs succeed. After all, we both know a thing or two about the little guy working to achieve greatness from their garage. That is the story of Microsoft and the mission of a16z.

We both firmly believe that when it comes to AI, the opportunities are enormous and that our way forward to building a new AI economy is by spurring innovation and fostering competition. The best way to encourage innovation while also ensuring safety and security is through a variety of responsible market-based approaches and business models, including open-source AI. Open-source models have contributed indispensably to major advances in technology and research for decades, often by reducing or eliminating power imbalances between major institutions and scrappy upstarts, allowing the academic and startup community to have greater access and build upon existing knowledge while also offering real-time peer review.

A16z views competition and innovation through the lens of Little Tech: small businesses and startups. A16z published its policy agenda for Little Tech in July, proposing a series of policy ideas to promote AI innovation through regulation that creates an even playing field across all industries. The goal of the Little Tech Agenda is to ensure that public policy supports startups, providing entrepreneurs the “freedom to research, to invent, to create jobs, to build the future.”

Microsoft is committed to making large-scale AI infrastructure investments that only a Big Tech company with our scope and size can afford, creating a platform that is affordable and easily accessible to everyone, including startups and small firms. These infrastructure investments are essential to creating opportunities for new businesses to experiment and grow in the AI economy. In February of this year, Microsoft announced a set of principles (referred to as the AI Access Principles) to govern its operations and deliver on this commitment. One primary tenet that informs Microsoft’s AI Access Principles is the critical need to “spur innovation and competition across the new AI economy.”

Together, we believe in a competitive and broad ecosystem that harnesses the potential of academic research and business innovation, including a vital role for open-source innovation that will unleash the ideas of tomorrow to make life better for everyone and our country more secure and prosperous. By coming together, we hope to drive innovation and creativity and further live up to our highest aspirations and ideals that have defined the U.S. for generations. These are the policy objectives to get us there.

The policy opportunity for AI startups

Microsoft and a16z jointly recognize an opportunity to advance public policy that will allow American entrepreneurs and innovators to do what they do best—build new tools and businesses that solve problems, create new jobs and opportunities, and enable startups to flourish. Ensuring that companies large and small have a seat at the table will better serve the public and will accelerate American innovation. We offer the following policy ideas for AI startups so they can thrive, collaborate, and compete.

• Regulation that promotes opportunity for U.S. businesses: U.S. AI laws and regulations should support the global success and proliferation of U.S. technology companies by promoting access and opportunity. This can be done by leveraging a science and standards-based approach that recognizes regulatory frameworks that focus on the application and misuse of technology. Regulation should be implemented only if its benefits outweigh its costs. In accounting for costs, policymakers should include an assessment of possible costs associated with unnecessary bureaucratic burdens to startups. As the new global competition in AI evolves, laws and regulations that mitigate AI harm should focus on the risk of bad actors misusing AI and aim to avoid creating new barriers to business formation, growth, and innovation.
• Competition and choice: enabling choice and broad access fosters AI innovation and competition. Regulators should not only permit providers to offer a broad array of models—proprietary and open source, large and small—but should permit developers and startups the flexibility to choose which AI models to use wherever they are building solutions and not tilt the playing field to advantage any one platform. Developers should have the freedom to choose how to distribute and sell their AI models, tools, and applications for deployment to customers.
• Open-source innovation: open-source software provides immense value to our economy by catalyzing the innovation ecosystem. It allows tech companies big and small the ability to build the next innovation quickly and gives them a wide array of tools for developing software safely, securely, and competitively. We believe the same is true for open-source AI models. They increase choice and allow startups to more easily develop fine-tuned systems and applications. The free availability and performance of these models allow startups to access, use, and benefit from AI by modifying it to suit their conditions and diverse needs. They also offer the promise of safety and security benefits, since they can be more widely scrutinized for vulnerabilities. Regulators and decision-makers should embrace a regulatory framework that protects open source and secures the ability of entrepreneurs, startups, and companies to create, build, transform and win the future.
• Open data commons: data is a critical input for all AI developers. There is a role for government to enable and craft policies that support a thriving and growing ecosystem of data around the globe through Open Data Commons—pools of accessible data that would be managed in the public’s interest. Governments should participate and lead this effort by releasing data sets in ways that are useful for AI cultural institutions and libraries. Governments should ensure that startups can easily access these data pools.
• The right to learn: copyright law is designed to promote the progress of science and useful arts by extending protections to publishers and authors to encourage them to bring new works and knowledge to the public, but not at the expense of the public’s right to learn from these works. Copyright law should not be co-opted to imply that machines should be prevented from using data—the foundation of AI—to learn in the same way as people. Knowledge and unprotected facts, regardless of whether contained in protected subject matter, should remain free and accessible.
• Invest in AI: the U.S. government should invest in AI to accelerate American innovation, strengthen our national security, and create economic opportunity. As part of this investment strategy, the government should examine its procurement practices to enable more startups to sell technology to the government.
• Help people thrive in an AI-enabled world: building a new AI economy that supports startups, and American entrepreneurship will require public policy that cultivates technical talent and engages digital citizens. To that end, policy should fund digital literacy programs that help people understand how to use AI tools to create and access information. It should also support workforce skill development and workforce retraining programs to help people secure jobs in an AI-driven economy.

We obviously live in a tumultuous time, often characterized by disagreements among people and groups. But as in every age, we need to seize opportunities to find common ground. The United States has built a tech ecosystem that has helped fuel the nation’s economic growth for more than half a century. As reflected here, we believe that Little Tech and Big Tech can contribute even more in the decades ahead by coming together. We can build on each other’s strengths, and we can advocate together for public policies that will serve innovation and the nation’s broader interests.