Axios AI+NY Summit: Startups fear new AI rules will entrench big tech and crush small competitors

NEW YORK — Flawed regulations could hand the industry's future to dominant giants before startup creators can push back, roundtable guests warned at an Axios AI+NY summit Expert Voices roundtable.

Why it matters: Confusing laws and slow access to new artificial intelligence tools will prevent startups from competing, while job losses go ignored.

Axios' Maria Curi and Ashley Gold led the June 3 roundtable, which was sponsored by the American Innovators Network, during New York Tech Week.

The top takeaways from the discussion include:

1. Without a national AI standard, the 50-state compliance labyrinth could prove fatal to small teams before they reach scale.

• "It becomes nearly impossible for an organization to actually be compliant with every possible privacy law that they're under the jurisdiction of," said Josh Schwartz, Phaselaw's CEO.
• Center for American Entrepreneurship president John Dearie said a patchwork "quilt of 50 states' standards is inherently confusing … and dangerous."

2. If regulators give big tech first access to frontier models, startups will fall further behind.

• "Before the public [gets] access, we should be able to get access," Veris AI co-founder and CEO Mehdi Jamei said.
• "You see a lot of trying to use regulation to create a wider barrier of entry," said Dmitri Mirakyan, co-founder of Creed.

3. AI has already restructured how startups hire and operate.

• Maya Gonimah, co-founder and CTO of Thread AI, said startups have turned engineers into "product owners," focusing on functional requirements and not "artisanal code."
• Mirakyan noted he hired "somebody out of a local boot camp" over AI master's graduates from NYU and Columbia because they "wound up performing significantly better."

4. Venture capital's shortened timelines are pushing unprepared AI companies toward IPOs, and the fallout could sour the market.

• "They're going to go public, and then they're going to fade tremendously. ... It's going to shorten the enthusiasm around the investor interest," Mogul co-founder Alex Blackwood said.

5. The real AI crisis is jobs.

• "The single most valuable piece of legislation around AI should be around helping people navigate career transition," Mirakyan said, adding that too many policymakers are focused on other issues.

Content from the sponsor's opening remarks:

Startups believe they have been cut out of AI policymaking and that the deck is structurally stacked against them, American Innovators Network senior advisor Cameron Onumah said.

• "It's been our goal … [in] making sure that 'little tech,' as we like to say, has a voice at the table," Onumah said.