The Small Business Administration (SBA) is amplifying its efforts to facilitate access to the necessary capital for triggering advancements in artificial intelligence, particularly in national security.
A Customer-Centric Transformation
Bailey DeVries, the director of SBA’s Office of Investment and Innovation, asserted that the agency is intensifying its support for small businesses venturing into AI research, which is part of a broader, customer-centric transformation within the organization.
According to DeVries, this transformation entails enhancing customer support and creating synergies across various programs, which requires substantial funding. The agency is actively working towards investing in improvements and enhancements that will drive efficiency.
Overcoming Funding Challenges
Many startups and innovation hubs struggle to secure funding with the recent collapse of traditional private equity backers like Silicon Valley Bank. However, DeVries sees a silver lining: the potential for these businesses to benefit from low-cost, government-guaranteed loans could be transformative, especially in a rising interest rate environment.
Revised Lending Criteria
In April, the SBA introduced a proposed rule to adjust the affiliation and lending criteria for SBA business loan programs, including the 7A working capital and 504 Loan programs. This rule, which took effect in May, addressed the longstanding regulation that prevented small businesses from receiving SBA funding if they had already obtained private equity funding.
Federal Regulations, AI Startups, and the PPP
DeVries revealed that the SBA leadership’s decision to amend these federal regulations was prompted by the realization that the existing rules hindered some AI startups from applying for SBA loans under the Pandemic Protection Program (PPP). Consequently, the SBA seeks to rectify these oversights to avoid excluding innovative businesses and startups from emergency funds.
Bridging the Defense Department and SBA
To expedite federal investments in AI, the SBA teamed up with the Defense Department in March to launch the Small Business Investment Company Critical Technologies Initiative. This initiative aims to augment DoD support and private investments in emerging technologies, including AI.
Building Trust in AI
DeVries emphasized that the SBA’s focus on accelerating AI research funding aligns with the broader goals of the Biden administration to promote trust and responsible development of AI. She highlighted the importance of leading change responsibly, considering the needs of different stakeholders, eliminating biases, and making informed decisions.
Public-Private Partnerships and AI Adoption
Additionally, the SBA recently formed a public-private partnership with the Small Business Digital Alliance to link tech companies like Meta, Google, and Microsoft with small businesses keen on adopting AI tools.
Continuing Support for Emerging Technologies
The SBA has a longstanding history of supporting emerging technologies through its Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. These programs encourage small businesses to participate in federal research and development projects and support the commercialization of pioneering technologies.
The Impact of AI on Jobs
While DeVries acknowledged that AI could displace some jobs, she posited that it could create new ones. She underscored the importance of making informed decisions about the use of technology to ensure inclusive equity and to open up opportunities for skill development, new company creation, and job growth.