Presently, Microsoft, Google, Anthropic, OpenAI, and Meta are the behemoths in the AI industry. They provide AI services, either language-based or image-based. But these are just a few names. Apart from them, an entire section of tech startups are struggling to succeed with their AI models.
This regulatory landscape is specifically troublesome for those startups, as they have been going through major scrutiny from regulatory bodies, especially in some fields like data privacy, consumer protection, and cybersecurity. Therefore, tech startups must understand and follow the rules set by the authorities to survive and become legal.
To cope with this situation, startup companies that involve technology-based work primarily focus on integrating compliance into their business models and frequent employee training programs. These sessions make the employees aware of the protocols to follow and ensure everyone is following the same ones.
The first thing that tech startups find troublesome because of these rapidly shifting AI regulations is funding and investment. The rapid shifts impact how venture capitalists and angel investors approach investment for a tech startup. Of course, investors mainly emphasize the sustainability of a startup.
Taking it a step further, the ’s new rules ask startups to disclose their environmental impact. The more a tech startup aligns with this rule, the more it will get investments.
Another thing that tech startups must follow is that their AI models must maintain an ethical approach toward the new norms, including transparency in algorithmic decision-making and protocols to protect user data.
To ensure that, tech startups must undergo strict and regular assessments. Assessing their algorithm models regularly confirms that the business model is fair and non-discriminating. Following this regular checkup model is necessary to prove fairness. Upon failing, these startups face hefty penalties.
