Representatives Russell Fry (R-SC) and Suhas Subramanyam (D-VA) have launched the bipartisan Innovators Caucus to promote small and medium-sized businesses in artificial intelligence. This initiative addresses the structural obstacles these companies face: limited access to funding, difficulty securing seed capital, complex R&D tax credit systems, and talent recruitment challenges. The Small AI Innovators Empowerment Act, introduced on March 17, 2026 by Subramanyam and Representative Jay Obernolte (R-CA), requires the Department of Commerce, NIST, and the SBA to conduct a study on barriers encountered by small AI companies. Changes to the U.S. tax code (Section 174), which now requires amortization of research expenses over five years, further strains the cash flow of these startups.
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