WASHINGTON — Representatives Russell Fry, a South Carolina Republican, and Suhas Subramanyam, a Virginia Democrat, launched the Innovators Caucus on Tuesday to support small and medium-sized artificial intelligence companies facing structural disadvantages against major tech corporations.
The caucus will target specific barriers: limited access to capital, difficulty securing early-stage funding, and a complex research-and-development tax credit system. It also plans to address talent competition and regulatory uncertainty.
One immediate obstacle is Section 174 of the tax code. Companies must now amortize research expenses over five years instead of deducting them immediately — a change that can cripple cash-strapped AI startups trying to hire engineers.
Subramanyam co-introduced the Small AI Innovators Empowerment Act with Representative Jay Obernolte, a California Republican, on March 17. The bill directs the Department of Commerce to study barriers small AI companies face, examining capital access at different development stages, R&D tax credit effectiveness, talent pipeline challenges, and the cumulative impact of regulatory uncertainty.
"U.S. leadership in AI relies on innovation within small businesses and startups," Subramanyam said.
Fry, who chairs the Congressional Robotics Caucus, brings experience from that group's 2025 expansion to address the overlap between robotics, AI research and development, and workforce policy.
The Innovators Caucus is the latest in a string of congressional efforts on AI. Speaker Mike Johnson and Democratic Leader Hakeem Jeffries announced a bipartisan AI task force in February 2023. Representative Ruben Gallego, an Arizona Democrat, has pitched a bipartisan AI Select Committee. The House AI Center was established in 2024, and Jeffries announced the House Democratic Commission on AI and the Innovation Economy, co-chaired by Representatives Ted Lieu of California, Josh Gottheimer of New Jersey, and Valerie Foushee of North Carolina.
