AI is shaping the policy landscape, but is less unified than expected

Topline

• AI stakes are rising as Congress works to develop legislative framework

• SBIR/STTR programs reauthorized

• Crypto corner

• The INVEST Act: Building for the next generation of American innovation

• FinCEN proposes rule that overhauls AML & CFT programs

• Quick hits

• Upcoming events

AI stakes are rising as Congress works to develop legislative framework

Washington returned from recess this week to a full inbox on AI and a shrinking calendar to do anything about it. Congressional leaders want to translate the White House’s AI framework into passable legislation before the August recess, after which the legislative window all but closes ahead of the midterms. This may prove an impossible task.

Congress is behind the curve and legislating against a moving target. AI capabilities are advancing faster than the policy process can accommodate. The fault lines are not clearly defined by issue or by party, and the industry itself is divided on what responsible regulation looks like. Meanwhile, the stakes keep getting higher.

DC infrastructure play. The major AI labs aren’t just building models; they’re building the policy infrastructure around them. Last week, OpenAI released a sweeping policy agenda covering economic disruption, workforce transition, and AI governance. Anthropic has previously advanced similar frameworks. Both companies are also expanding their DC footprints and campaign war chests, arriving in Washington not just as technology companies but as policy architects with detailed blueprints for how Congress should respond to the AI moment. 

Little tech enters the chat. The American Innovators Network—a coalition backed by a16z, Y Combinator, and 30+ startups—is ramping up its congressional presence to push back on proposals championed by well-capitalized incumbents. Their core concern is structural: safety mandates, compute requirements, and compliance regimes designed around frontier-scale operations tend to function as barriers to entry for smaller developers, regardless of intent, foreclosing competition and chilling innovation. AIN’s priority on the Hill is elevating state-level transparency frameworks—particularly California and New York—as a template for federal preemption.

The stakes are rising. Concerns about AI’s economic displacement effects and energy costs have been present for months, but the cybersecurity threat has now become concrete. Anthropic shook the ecosystem with its preview of Mythos, a highly advanced model reportedly so capable at identifying software vulnerabilities that it is not being released publicly.  Instead, Anthropic is making it available to a select coalition of companies to shore up defenses. Notably, the federal government has not been part of that process to date  as a result of the DOW supply chain designation. Against that backdrop, Treasury Secretary Bessent and Fed Chair Powell convened banking industry leaders to convey the seriousness of current exposure and threats to financial stability. 

Net/net: Policymakers are behind the curve on an issue they don’t fully understand,  but one that has become a matter of financial stability, national security, and economic competitiveness. And while Washington gets up to speed, the technology continues to move, and the world continues to change.

What to watch: AI will dominate the congressional agenda through summer, but a comprehensive framework before the midterms remains unlikely. Political fault lines on AI do not run cleanly along party lines, which makes coalition-building unpredictable. If Democrats calculate they have a path to flipping a chamber next cycle—a reasonable read given historical midterm patterns and current sentiment—they may have limited incentive to hand the current majority a bipartisan AI win. In the meantime, expect hearings, targeted bills, and continued pressure from both frontier firms and smaller developers as Congress works to define its role—and the states will continue to do the same.

SBIR/STTR programs reauthorized

President Trump signed the Small Business Innovation and Economic Security Act into law on April 13, reauthorizing the lapsed SBIR/STTR programs through FY31 after a five-month standoff. The bipartisan agreement includes a new “Strategic Breakthrough” initiative for high-impact technologies, strengthened foreign-influence protections, and annual proposal limits replacing lifetime caps, preserving growth pathways for startups while addressing concerns about program concentration.

Why it matters: SBIR/STTR provides critical, non-dilutive capital sources for early-stage innovation and defense tech. The lapse disrupted research pipelines and capital planning for small firms and universities. Carta advocated alongside ecosystem partners and testified before Congress on the program's impact on broadening access to capital and competitiveness.

Crypto corner

Digital asset regulation is accelerating on all fronts. Market structure legislation faces a narrowing legislative window in Congress, while regulators move ahead,  implementing the GENIUS Act, providing regulatory clarity, and building the infrastructure for mainstream integration.

• CLARITY Act update. Key Senators have reportedly reached a tentative deal on stablecoin yield, which could remove one of the biggest obstacles that has prevented the landmark bill from moving forward. The White House Council of Economic Advisers released a report finding that stablecoin yields do not threaten bank deposits, aligning with the crypto industry’s position in debate, while bank trades refute the results.
  
  But even with a compromise on stablecoin yield, other provisions regarding DeFi developer liability and a push for ethics language to bar government officials from personally profiting on crypto remain unresolved. The Senate Banking Committee is planning to consider the legislation before the end of the month, with some Senators warning that failure to advance to the Senate floor by May could jeopardize the bill’s chances of being signed into law. 
  
  

• Regulation Crypto Assets awaits White House sign-off. The SEC’s “Regulation Crypto Assets”proposal is under review by OMB—a procedural signal that a formal proposal is imminent. As Chairman Atkins previously outlined, Reg Crypto is expected to establish fundraising pathways for tokenized assets and  startup exemptions in line with the “Project Crypto” regulatory agenda. This would mark the most significant SEC crypto action to date, replacing ad hoc guidance with a structured rule framework.
  
  

• Bank regulators move to implement GENIUS Act stablecoin framework. Federal banking regulators are implementing the architecture for bringing stablecoins into the regulated banking system. On April 7, the FDIC approved a proposed rule establishing a prudential framework for FDIC-supervised stablecoin issuers, setting standards for reserve composition, redemption rights, capital, and risk management. The proposal is designed to align closely with the OCC’s February framework, signaling a coordinated approach across bank regulators. On deposit treatment, the rule draws a clear line: stablecoin reserves held at banks would not receive pass-through deposit insurance for token holders, while tokenized deposits that meet the statutory definition of a “deposit” are treated the same as traditional deposits. The message is consistent with the broader regulatory posture— tokenization changes the plumbing, not the policy. 
  
  Separately, Treasury released a proposed rule establishing how it will assess whether state-level stablecoin regimes meet the GENIUS Act’s “substantially similar” standard, the threshold that determines whether issuers with $10 billion or less in outstanding issuance can opt into state rather than federal oversight. How Treasury defines “substantially similar” will determine whether state regimes function as genuine alternatives to federal oversight or become a de facto federal floor, shaping the competitive landscape for smaller stablecoin issuers and state regulators jockeying for position.

The INVEST Act: Building for the next generation of American innovation

Read our latest on the INVEST Act—the most ambitious capital formation legislation in over a decade. This legislative package passed the House with a strong bipartisan 302-123 vote in December 2025 and aims to modernize the policy infrastructure underpinning our innovation ecosystem by:

• Broadening access to capital. Expands qualifying VC investments to include secondaries and investments in other VC funds, expands size and investor limits for qualifying VC funds, and raises the private fund exemption threshold.

• Expanding investment and ownership opportunities. Modernizes the accredited investor standard by adding sophistication-based on-ramps, expands retail exposure to private funds, and enables 403(b) participants to access products available to other retirement savers.

• Lowering barriers to IPO. Expands WKSI status to smaller public companies, reduces financial statement burdens for EGCs, and permits companies to test the waters by communicating with potential investors and draft registration statements.

Bottom line: The bill removes regulatory friction that concentrates capital, and Carta will continue to advocate and engage the innovation ecosystem to ensure these priorities make it across the finish line.

FinCEN proposes rule to overhaul AML/CFT programs

FinCEN proposed significant reforms to its anti-money laundering / countering the financing of terrorism (AML/CFT) program, replacing it with a  framework built around program effectiveness rather than technical compliance. Under the proposal, financial institutions must conduct periodic risk assessments tied to FinCEN’s national AML/CFT priorities and demonstrate that their controls actually detect and mitigate risk. The rule draws a formal distinction between program design failures and operational failures, with enforcement reserved for significant or systemic breakdowns. 

Why it matters: The proposal signals a shift from process to outcomes: firms get more flexibility to tailor programs to their business models, but face higher expectations around risk methodology, data quality, and monitoring infrastructure. Notably, the proposal does not include the IA AML Rule, which applies BSA obligations directly to investment advisers and private fund managers. As of now, this rule remains effective, with implementation delayed until 2028. FinCEN has previously signaled amendments to the IA rule, which will most likely follow the risk-based and reasonably designed standard outlined in the broader AML/CFT reform proposal.

Quick hits

• Kalshi notches legal wins as courts curb state oversight. Kalshi secured back-to-back court victories, with a federal appeals court ruling that New Jersey cannot apply its gambling laws to block the platform, followed by a federal judge pausing Arizona’s criminal case at the urging of the CFTC, which has committed to intervene in state law challenges. These results are a meaningful signal for prediction markets and adjacent fintech models that the regulatory perimeter is being drawn at the federal level, not state-by-state. What to watch: Whether this framework holds across jurisdictions, and whether Congress steps in to clarify the regulatory perimeter for event contracts.
  
  

• SpaceX confidentially files for IPO, setting stage for record offering. SpaceX confidentially filed for an IPO on April 1, targeting a mid-2026 listing at a valuation that could exceed $1T, making it the largest public offering on record. The filing puts SpaceX on track to be the first of what could be a trio of mega-IPOs, ahead of OpenAI and Anthropic, both of which are widely expected to follow with their own IPOs in 2026. OpenAI closed the largest private funding round in Silicon Valley history at $852B earlier this month; Anthropic is reportedly generating nearly $19B in annualized revenue and closing a new raise of its own. Three of the most consequential private companies of the AI era are moving toward public markets; the stress test will be whether the public markets can absorb them at a valuation that reflects the mega-private speculative infrastructure value, not just current earnings.
  
  

• SEC announces enforcement results for Fiscal Year 2025. The SEC released FY25 enforcement results showing a deliberate shift from technical violations to substantive fraud. The agency filed 456 enforcement actions (fewer than prior years) but obtained $17.9 billion in relief through multi-year investigations. During the Gensler era, the Commission brought actions for  95 book-and-record violations that did not result in direct investor harm. Expect the Commission to prioritize effectiveness over volume, signaling a reset in how fund advisers will be scrutinized under new Enforcement Director, David Woodcock.
  
  

• Trump Accounts put Robinhood in front of the next generation of investors. The Treasury designated BNY Mellon as the financial agent and Robinhood as brokerage and initial trustee for Trump Accounts, the tax-advantaged youth investment vehicles created under the One Big Beautiful Bill Act. Scheduled to launch July 4, 2026, more than 4 million children are enrolled, with roughly 1 million eligible for $1,000 federal seed contributions. The accounts include portability provisions allowing families to switch institutions within a year. Program success could prompt Treasury to model similar government-backed investment vehicles; Congressional oversight could follow if account performance, portability windows, trustee limitations, or fee structures attract criticism.
  

Upcoming events

• House Financial Services Committee Hearing: Safeguarding Main Street: Combatting Fraud and Exploitation in Our Capital Markets - April 15 at 7:00 a.m. PT/10:00 a.m. ET
  
  

• Carta Webinar: PE Compensation Series with Davis Polk, Part 3: Management Rollovers and Incentive Equity Structures for Portfolio Companies - April 15 at 10:00 a.m. PT/1:00 p.m. ET
  
  

• National Institute of Standards and Technology: Workshop on Blockchain and Distributed Ledger Technologies - April 16 at 7:00 a.m. PT/10:00 a.m. ET
  
  

• House Financial Services Committee Hearing: Promoting Access to Credit for Everyday Americans - April 16 at 7:00 a.m. PT/10:00 a.m. ET
  
  

• Securities and Exchange Commission: Options Market Structure Roundtable - April 16 at 6:00 a.m. PT/9:00 a.m. ET
  
  

• Select Committee Hearing: China’s Campaign to Steal America’s AI Edge - April 16 at 8:00 a.m. PT/ 11:00 a.m. ET
  
  

• House Financial Services Committee Hearing: Diversifying Risk: The Benefits of Reinsurance and Credit Risk Transfers - April 22 at 7:00 a.m. PT/10:00 a.m. ET
  
  

• House Financial Services Committee Hearing: Evaluating the Effectiveness of U.S. Sanctions Programs - April 22 at 11:00 a.m. PT/2:00 p.m. ET
  
  

• Carta Webinar: Capital Is Up. Hiring Is Down. The New Rules of Startup Comp. - April 23 at 10:00 a.m. PT/1:00 p.m. ET
  
  

• House Financial Services Committee Hearing: Prioritizing Main Street: Evaluating the Impact of Capital Proposals on Economic Growth and American Communities - April 28 at 7:00 a.m. PT/10:00 a.m. ET
  
  

• Securities and Exchange Commission: Small Business Capital Formation Advisory Committee Meeting - April 28 at 7:00 a.m. PT/10:00 a.m. ET
  
  

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