What happens to Washington's emerging tech investments now?

Presented by Salesforce: How the next wave of technology is upending the global economy and its power structures
Dec 04, 2024 View in browser
 
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By Christine Mui

Presented by Salesforce

With help from Derek Robertson

President Joe Biden speaks during an event in front of a Tech Hubs screen.

President Joe Biden speaks during an event from the South Court Auditorium of the Eisenhower Executive Office Building on the White House complex, Oct. 23, 2023. | Jacquelyn Martin/AP

With the coming transfer of power in Washington, the Biden administration finds many of its big policy ideas in danger of being unwound or abandoned. Among them is a broad plan to launch clusters of innovation and startup activity around the country.

Two of the programs at the heart of that vision are the Tech Hubs, managed by the Commerce Department, and its earlier stage, research-driven counterpart at the National Science Foundation, the Regional Innovation Engines.

The idea is to help bring the American innovation economy to places beyond Silicon Valley — creating a more dispersed tech ecosystem that spreads the wealth, and even perhaps boosts the odds of discovering the next transformative industry. Both were established by the 2022 CHIPS and Science Act.

When it comes to disruptive technologies like the internet and artificial intelligence, science and tech advocates often credit the importance of consistent federal investments in R&D that laid the groundwork years before a tangible breakthrough.

The problem is it takes a staggering amount of money to create an environment that can go toe-to-toe with Silicon Valley and compete on the global stage. And both initiatives have been shortchanged for the past few years in a divided Congress, with as much as $10 billion promised for Tech Hubs, and only $541 million delivered.

Now, questions swirl around even that more modest sum — with a Trump administration obsessed with cost-cutting set to take over, and Republicans controlling both houses of Congress. Will projects that have only received “seed feeding” still take off? Are any extra funds arriving?

Those uncertainties took center stage at a summit hosted by the agencies running the programs Tuesday and Wednesday. There, lawmakers, administration officials and program participants considered how to turn bipartisan anxiety about American competitiveness into actual dollars from the next Congress.

“I can’t predict whether or not there’s going to be additional funding,” Cristina Killingsworth, the Commerce Department’s acting secretary for economic development, told reporters. “What I can say is that everybody is behind the idea of bolstering U.S. economic competitiveness and U.S. national security, and so we’re hopeful that the program will continue for years to come.”

NSF head Sethuraman Panchanathan, a Trump appointee, said he's already brought the pitch to key lawmakers from both parties, including Kansas Sen. Jerry Moran, the top Republican on the panel responsible for Commerce and science funding.

The programs will officially survive as long as the CHIPS Act does, but Congress could lose interest and leave them — at best — in their current small-ball state.

One strategy laid out by Sen. Todd Young (R-Ind.) — a strong supporter of onshoring tech expertise and fully funding Tech Hubs — is to focus on selling lawmakers on the practical benefits of innovation in areas like artificial intelligence, and also to leverage worries about staying ahead of China. Members of Congress in particular, he said, care a lot about national security and our biggest economic rival at this moment.

“If we can frame our economic challenges, our requested investments … within the context of the U.S.-China competition, or the U.S.-Russia or Iran competition, that's highly compelling for individuals,” Young said. “If we do all of those things, I think we have a chance of actually having some appropriations.”

The summit also included one of the congressional appropriators, Rep. Chuck Fleischmann (R-Tenn.), who said he believes “America needs to invest in itself” — but to appeal to his colleagues, he suggested that science and tech leaders had to be careful and mindful of showing real results. 

The actual recipients of the innovation money — the designated “tech hubs” and engines scattered around the country — told reporters they’ve started spending award money on planning and hiring. They're also trying to keep Washington’s attention on their projects, though some have successfully raised money outside federal channels amid the uncertainty.

“It’s not just that we can rely on any governmental agency or leader that's currently in an office,” said Jennifer Hankins, part of a Tulsa, Okla., hub that won $51 million for autonomous technologies. “For us, it’s the state, plus the legislature, plus our philanthropic backing, as well the corporate engagement, all of that together.”

Hollie Mackey, CEO of a North Dakota “innovation engine” that received $15 million from the NSF to advance agricultural tech, said she felt optimistic about Washington’s commitment to tech innovation, and that her group expects continued “extremely strong support” from both of its senators, including Republican appropriator John Hoeven.

“There's some new faces who are going to be in the mix, but we've seen nothing but broad support and really commitments too,” she said. “Is anybody going to say ‘we're going to do specific things’? No, the election just happened. But we do have a firm commitment that we are top of mind and that they care deeply, and that they are willing to work with us."

 

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crypto laundering crackdown

The Treasury Department brought sanctions against several people and businesses it alleges are using cryptocurrency to launder money.

POLITICO’s Michael Stratford reported for Pro subscribers on the action against five individuals and four companies linked to the TGR Group, which it called a “sprawling international network” helping Russian elites avoid sanctions using stablecoins including Tether. One is Pullman Global Solutions LLC, based in Wyoming and owned by Andrejs Bradens, a Latvian national.

“Through the TGR Group, Russian elites sought to exploit digital assets—in particular U.S. dollar-backed stablecoins—to evade U.S. and international sanctions, further enriching themselves and the Kremlin,” acting Undersecretary for Terrorism and Financial Intelligence Bradley Smith said in a statement.

The Treasury Department said it coordinated with U.K. authorities, who also today announced a major crackdown on crypto money laundering that included the TGR Group.

 

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green-vidia

Nvidia is considering concrete climate targets as part of a push for greener AI, according to its senior director of corporate sustainability Josh Parker.

E&E News’ Zia Weise reported on his comments for Pro subscribers today, as Parker said the company is “considering specific emissions-reduction targets in addition to our clean energy target right now.”

“There have been a lot of reports of the potential negative environmental impacts from AI and the deployment of AI, and those are all valid concerns,” Parker told Zia today in Brussels during a visit with European Union lawmakers. He argued that many of those reports “don’t take into account all of the factors that really should be considered … and we’re trying to help educate policymakers and press and anyone else.”

According to Nvidia’s sustainability report, it emitted more than 3.6 million metric tons of CO2 equivalent at the end of the 2024 financial year, roughly equivalent to half of Latvia’s annual emissions, or slightly more than Iceland or Haiti.

 

Billions in spending. Critical foreign aid. Immigration reform. The final weeks of 2024 could bring major policy changes. Inside Congress provides daily insights into how Congressional leaders are navigating these high-stakes issues. Subscribe today.

 
 
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