A recent Bluevine survey of more than 750 US small business owners (SBOs) reveals that 61 percent view AI will help them grow. Their optimism is understandable: in just a few short years, AI has already started easing some of the biggest pain points of running a small business, with 28 percent of SBOs currently using AI to aid in customer support, while another 39 percent are using it to help them in their marketing.
But beyond the practical uses for AI, there’s a regulatory battle brewing that will affect how soon and how thoroughly AI advances will be able to transform their businesses. In the battlefield of global innovation, AI regulation will be the major deciding factor in determining when and who will be first to reach artificial general intelligence. It may seem hyperbolic, but given those table stakes, our needs for the future of AI innovation in the US have never been clearer: we need to usher in an era of smarter, tailored AI regulations instead of attempting to overregulate the emerging industry with a one-size-fits-all approach.
Assessing the Political Landscape
As fintech leaders navigate a delicate balance between innovation and compliance, even modest regulatory changes can significantly slow the rollout of tools that would otherwise empower small businesses to run more efficiently–tools like faster fraud detection, proactive cash management, and co-pilots that can autonomously manage a customer’s account.
For enterprise-level companies, the delays in the delivery of those tools can be mitigated thanks to larger teams and dedicated resources solving those tasks. For small businesses, the delays can be the difference between a path to financial prosperity and floundering.
Make no mistake: regulation is a necessity in the financial sector to protect consumers and maintain trust, where it can be the difference between them losing hard-earned savings and being able to confidently operate with security. But more often than not, excessive or poorly defined rules stifle progress and can be viewed as an overt detriment, especially true when viewed in contrast to how other countries are choosing to regulate AI.
Take, for instance, China. Ignoring the obvious global political tensions between the US and China, the country’s approach to supporting AI growth via streamlined regulations and infrastructure development is remarkable. The country’s focus during the initial wave of Gen AI development–the “Interim Measures for the Management of Generative AI Services”–was around regulating end-user capabilities and national security while its most recent regulatory implementations have been around eliminating roadblocks for AI center development through national funding and rapid infrastructure expansion.
Compare that to the US, where the “One Big Beautiful Bill” that was signed into law on July 4 proposed–then rescinded–a 10-year moratorium on states enacting their own regulations. Protecting the use of AI to exploit minors is, without question, an imperative. However, the resultant removal of the moratorium, altogether with no concrete guidance as to the scope of future regulation, means that states can introduce legislation that is inconsistent and conflicting.
Experts have referred to the race for global AI supremacy as the new Cold War. Whichever country wins the race will cement its economy and the businesses therein, as the world leaders for decades to come. Compared to China, the fact that we are continuing without a clear view on regulations and a united front on how to support widescale AI infrastructure is concerning. The US must not fall behind.
What Fintech Leaders Want and Small Businesses Deserve
It might seem like geopolitical tensions and international technology races are far removed from the realities of a cafe owner or dentist, but the reality is that AI’s radically transformative potential can revitalize not only small businesses but entire cities and communities.
Yet in the fintech space, startups face growing compliance complexity, uncertain regulatory futures, and overlapping oversight bodies. At Bluevine, as we prototype AI-based capabilities, we see firsthand the gap between what’s technically possible and operationally viable under current rules. Small businesses want tools to move money faster, automate administrative tasks, and gain a clear understanding of their financial health at a glance. Launching a CFO agent that SBOs can use to make decisions and automate burdensome financial tasks is in the best interest of both entrepreneurs and consumers. All of these capabilities should be subject to strict controls. The key is ensuring those protections don’t prevent meaningful innovation.
What’s the Solution? Let the Markets Work.
Instead of blanket restrictions, policymakers should carefully weigh the risks and rewards of AI regulation on the current economic engine and the people who actually drive it. Regulation should be sensible but not overreaching. As we always have, the government should allow businesses to compete and introduce the features that small businesses need and that consumers are seeking.
The essence of American innovation has always been our commitment to letting the markets function freely. If we adopt a similar strategy with AI, we stand to foster further innovation that keeps the United States as the leader. For the fintech industry, one thing is clear: smarter AI regulation, not more of it, will futureproof our American ingenuity.
