Author: Bani Singh
Graphics: Business Review at Berkeley
The rapid growth of the AI industry has sparked immense lobbying efforts in recent years as major tech companies influence policies that foster innovation and development of these platforms. As organizations continue to shape regulations, their efforts also economically influence businesses in a variety of ways.
The Rise of AI Lobbying
Introduction
Artificial Intelligence (AI) is a versatile platform, and its growth can be attributed to its impact on various aspects of life. As AI technologies continue to evolve, many big tech companies have made efforts to shape policy and legislation towards its development. For instance, the number of organizations advocating for AI-related issues has seen a dramatic increase, rising by 190% in 2022, and reaching a total of 460 organizations in 2023. Furthermore, in 2023, more than 1,100 lobbyists were deployed to convince the White House to adopt their chosen policies on AI. This broad expansion of the AI lobbying sector highlights the rapidly intensifying competition among corporations to influence government AI policy.
While there is very limited comprehensive data isolating total lobbying expenditures that went exclusively toward artificial intelligence, the larger tech industry invested roughly $61.5 million in federal lobbying initiatives in 2024. This significant investment underscores the determination of these firms to shape regulatory decisions that could impact their market dominance and technological innovation.
After the election of President Trump, corporate tech leaders have sought less government intervention in their companies. Platforms such as Meta, Google, and OpenAI have asked the Trump Administration to block certain state AI laws that restrict them from utilizing copyrighted material to train their AI models. In addition, these companies are also lobbying for accessibility to federal data and energy sources to improve their platforms and meet their massive computing demands. They have also asked for economic benefits such as tax breaks, grants, and more.
OpenAI, for example, is advocating a regulatory approach that prioritizes rapid implementation but also streamlined regulation. This approach aligns strongly with a recent executive order issued by the Trump Administration, which declares that it is “the policy of the United States to sustain and enhance America’s global AI dominance in order to promote human flourishing, economic competitiveness, and national security.” Furthermore, OpenAI is actively engaged with policymakers to shape developing pieces of AI legislation, with the goal of further improving the platform’s development in the United States. These pieces of legislation include, for example, the House’s AI Advancement and Reliability Act and the Senate’s Future of Artificial Intelligence Innovation Act. As a result of their efforts, OpenAI spent $1.76 million on government lobbying in the past year — in stark contrast to the $260,000 they spent on lobbying in 2023.
Under similar motivations, Google has submitted extensive policy proposals, which emphasize that existing restrictions are hindering technological innovation — specifically, the advancement of AI — within the United States. Google, Microsoft, and Meta have lobbied on several distinct bills. The AI Labeling Act of 2023, for instance, sought to disclose the acknowledgment of artificial intelligence in output creation to balance transparency and operational feasibility in order to gain consumer trust for their platforms. In addition, the CREATE AI Act of 2023 was established to support the benchmarking of AI systems by constructing the National Artificial Intelligence Research Resource (NAIRR) to provide low-cost access to data sets and computing resources for AI development. As a result, lobbyists seek to produce an environment that promotes academic research, innovation, consumer protection, and the ethical usage of AI.
AI Arms Rac
In the context of global competition, geopolitical tensions and concerns over technological competition and national security have influenced AI policy. For instance, the escalating rivalry between the U.S. and China, also coined as the “AI Arms Race,” has resulted in efforts to prevent China from acquiring computing technology and American chips. In fact, the U.S. added 80 entities to its trading export blacklist targeting Chinese operations amongst a few other countries.
China’s newest AI model, DeepSeek R1, has developed a reasoning model similar to OpenAI’s while only spending a fraction on graphic processing units (GPUs). However, this remarkable advancement has significantly increased fervor among the tech community for increased investment to outcompete China in AI technologies. President Trump, in response to this development, reaffirmed his position on limiting AI restrictions as he asserted “We’re going to unleash our tech companies and we’re going to dominate the future like never before.” In fact, OpenAI had announced the initiation of the Stargate project, in collaboration with other companies, to invest $500 billion in AI infrastructure in the United States and “protect the national security of America and its allies.” These measures, therefore, reflect a broader sentiment for aggressive investment and development strategies in AI to maintain a leading position in the global tech landscape.
Economic Implications for Business
AI lobbying has far-reaching economic implications, shaping everything from operations to investment trends, and market competition.
Business Productivity and Market Growth
In terms of business productivity, companies that incorporate AI platforms report higher productivity in their operations. Especially as data collected from customer interactions, market trends, and more can be optimally processed and analyzed for strategic insights as a result of AI. However, the adoption rate remains limited to 5% in the U.S. due to the high costs dedicated to customizing AI for specific business needs. Major tech companies such as Amazon, Meta, Google, and Microsoft have each spent over $10 million on lobbying efforts in recent years. Companies have justified these increased expenditures by securing policies that align with their growth strategies, such as tax incentives for AI research or regulatory exemptions that reduce operational costs.
Big tech firms have lobbied to boost domestic semiconductor manufacturing, for instance, which they argue is necessary for AI infrastructure. Their efforts ultimately led to the Biden Administration’s passage of the CHIPS and Science Act of 2022, which allocated nearly $53 billion in federal funding for this purpose. Unsurprisingly, part of the legislation includes additional subsidies, tax breaks, and federal funding from agencies such as the NSF (National Science Foundation), DOE (Department of Energy), and NIST (National Institute of Standards and Technology), all intended to further promote AI research and development. As a result, AI platforms have bolstered their ability to become more accessible to companies that haven’t previously adopted the technology.
Investment Trends and Stock Market Influence
Regulatory changes are also closely monitored by investors since policies that result in lighter regulation, tax breaks, and federal subsidies often encourage stock price appreciation and investment in emerging technologies.
For instance, after the revocation of former President Biden’s Executive Order 14110 (Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence), which promoted federal oversight of AI development in the U.S., the stock price of several companies increased. Nvidia (NVDA) stock, for example, went up immediately in the days following the revocation. The market also reacted favorably to major chipmakers, such as AMD and Intel. Additionally, the previously discussed CHIPS Act not only solidified investor confidence in semiconductor stocks but also introduced a 25% tax investment tax credit for investments in advanced manufacturing facilities, which positively impacts companies developing AI by lowering costs for hardware and encouraging domestic semiconductor production.
With the number of organizations lobbying for AI increasing dramatically in recent years, accompanied by the Trump Administration’s recent position on deregulation, it is reasonable to expect further investment from big tech companies into lobbying efforts. These companies are poised to capitalize on the current political climate due to financial advantages, infrastructure and market consolidation, and overall government support to shape regulations and policies that govern AI development, potentially steering them toward more favorable outcomes that align with their business interests and innovation goals.
Competitive Landscape
That being said, lobbying can produce a highly competitive landscape that benefits large corporations with the resources to shape policy. Essentially, lobbying allows them to influence compliance requirements so they are more expensive to implement and ultimately advantage larger corporations at the expense of smaller corporations and startups. For instance, OpenAI has dedicated funds and efforts to lobby for regulations that specifically align with their proprietary models. These developments limit market competition as a result.
Strategic Recommendations
Though AI regulation is taking shape, startups and small businesses are being left out of the discussion. Especially as compliance costs and regulations that emphasize ethical practices often stifle the innovation that allows them to popularize their platform. However, to set them apart from larger corporations, businesses that prioritize ethical practices, such as transparency in AI systems, secure privacy obligations, and accountability in AI decisions, can develop a positive reputation that attracts investment and consumer trust.
Furthermore, businesses outside of big tech can develop strategies that influence lobbying efforts, especially in this current political climate characterized by deregulation and the Trump administration’s favorable stances towards “pro-growth” AI policies. Initiatives could encompass collaborative efforts through industry associations and coalitions to increase their success in achieving policy changes. Such coordinated efforts not only strengthen the bargaining position for smaller companies and startups but also foster a unified voice that resonates more powerfully with policymakers as a result.
Take-Home Points
- Lobbying for Artificial Intelligence has seen a dramatic increase in recent years, with roughly 462 organizations lobbying for AI in 2024.
- The Trump administration’s “pro-AI” position has allowed companies to lobby for less restrictive policies and pieces of legislation that foster innovation and the development of AI platforms in the U.S.
- Amidst intense Sino-American tensions between the U.S. and China, both countries are dedicated to outcompeting each other in AI technologies in order to protect their domestic industries and national security.
- Recent developments in AI lobbying have had economic impacts on businesses as well, creating a competitive advantage for big tech companies at the expense of smaller businesses and startups, who lack the resources for political influence.
- Small businesses that want to have more of a stake in the AI policy discussion should prioritize the ethical usage of AI to attract investments and consumer trust. In addition, joining coalitions and other industry associations could amplify the voices of tech companies to make their insights more powerful.