Full Committee Hearing: “AI on Main Street: How AI is Shaping the Future of Small Business"

Chairman Roger Williams (R-TX)SPEAKER_17

Good morning, everyone. I now call the Committee on Small Business to order. Without objection, the chair is authorized to declare a recess of the committee at any time. I now recognize myself for my opening statement. Welcome to today's hearing, AI on Main Street: How AI is Shaping the Future of Small Business. I want to thank our witnesses for coming with us today and and being part of this. Artificial intelligence has quickly transitioned from month from a novelty to an indispensable business tool for Main Street businesses across the country. AI is streamlining administrative tasks that once required significant time and resources, and it's allowing small businesses to focus on growth instead of paperwork. Small businesses are using AI to respond quickly to customers, manage inventory, strengthen cybersecurity, and automate routine paperwork. As a small business owner myself, I have seen the difference these tools can make, and I know firsthand how much of that burden falls on the owner. Artificial intelligence is no longer something reserved for big tech companies and Fortune 500 boardrooms. Today, nearly three-quarters of small businesses are using AI in some form, and this is more than triple the share from just 3 years ago. So small businesses are closing in on the technology gap with the big corporations faster than any prior wave of innovation. And importantly, early data is showing that AI's rise is not coming at the expense of workers. In fact, 82% of small businesses using AI grew their workforce over the past year. Of course, real barriers to broader AI adoption remain. Many owners tell us that they simply don't know how or where to start, and that they worry about costs so that they are unsure how to keep their data secure. But one of the biggest barriers in Washington is created, it's called uncertainty. And the Biden administration took a heavy-handed approach to AI. On October 30, 2023, they released the executive order imposing sweeping regulatory requirements and compliance burdens that that threatened to smother AI innovation before small businesses ever got the chance to benefit from it. We only need to look across the Atlantic to see where that road leads. Europe chose to recognize regulate first and innovate later, and today the small businesses are falling behind, and the United States cannot make the same mistake. Thankfully, the Trump administration reversed course. They rescinded the Biden approach and replaced it with a pro-innovation strategy through Executive Order 14179 and America's AI Action Plan, clearing way for red doing away with red tape so that AI tools can be adopted with confidence. The SBA is doing its part by also expanding access to AI through a its new Main Street AI Accelerator Program. And of course, the committee has led the way with bipartisan legislation such as the AI WISE Act, the AI for Main Street Act, and the SBA Artificial Intelligence Utilization Act of 2026. So together, these bipartisan bills ensure that entrepreneurs have access to practical AI and that barriers to AI adoption are reduced. Our goal is to make every small business and entrepreneur make sure they have the opportunity to succeed in the emerging age of AI. So when small businesses have the tools, they have the training and freedom to innovate, they will outcompete, they will outbuild, and outhire anyone in the world, and our economy will be stronger because of it. I want to thank our witnesses again for joining us today. I look forward to the conversation ahead. And I now yield to Ranking Member Congressman Cisneros from the great state of California.

Rep. Gilbert Cisneros (D-CA)SPEAKER_16

Good morning, and thank you, Mr. Chairman, for convening this important hearing. Artificial intelligence will revolutionize the way businesses work and human— and humans operate. AI could allow Main Street businesses to scale their capabilities and perform routine tasks faster and cheaper. However, AI's many risks have incurred costs for small firms. AI can produce false outputs, a phenomenon known as hallucinations. Further bias and discrimination in AI decision-making undermines its effectiveness and duly hurts underserved communities and exposes users to legal and reputational harm. And AI companies often take and use the data and information users input into their models for further training and sale to other parties, posing privacy risk. It is challenging to know exactly how to assess and address these problems, in part because AI developers, through automated machine learning, and, and most AI developers do not disclose their model's training information. I support the consideration and use of AI by our small businesses, but we need to protect our businesses from flexible flaws. Small businesses need to be ready to effectively evaluate and adopt these tools. Uneven access to AI and knowledge about how to use it and avoid its risks threaten to cut whole segments of our population off from the benefits of AI. Underserved people have especially fallen behind in their understanding of AI tools, increasing the digital divide and hurting their businesses. It is this committee's responsibility to address these issues. The SBA must provide AI literacy resources to educate entrepreneurs on the risk and potential benefits of AI. This will reduce the digital divide and equip entrepreneurs with the tools and information to make well-informed, thoughtful decisions about whether AI is right for them, what AI can and cannot do, and which specific AI tools are suitable for a specific task. Furthermore, the inherent risk of AI must be addressed through smart and sensible AI regulation. Smart, well-crafted federal regulation will minimize the risk of AI, maximize its benefits, and prevent criminal and unethical use. These regulations are, are needed to protect all Americans, especially small business owners. Small businesses are crucial to the technological progress of our country. Entrepreneurs use their unique perspectives, passion, and resourcefulness to support and grow our country's economy. That's why we must support our small businesses by educating them on this revolutionary technology, how to use it effectively, and how to avoid its risks. Risk. It is important that the federal government supports small businesses developing new AI technologies with safety and security in mind. It is vitally important that we do not leave small businesses behind as we race to enhance our country's competitiveness. I look forward to discussing how we can better assist our small businesses in this new era. With that, I thank the witnesses for being here today, and I yield back.

Chairman Roger Williams (R-TX)SPEAKER_17

Gentleman yields back. We will now move to witness introductions. First witness is Mr. Jordan Crenshaw. Mr. Crenshaw is the Senior Vice President at the U.S. Chamber of Commerce Technology Engagement Center. Before joining the chamber, he was an attorney focused on environmental issues and consumer privacy laws. Mr. Crenshaw worked at McGuireWoods and also held roles in the Virginia Senate leadership, the Office of the Attorney General of Virginia, the U.S. Department of Labor, and the National Right to Work Defense Foundation. He earned both his undergraduate and law degree from the College of William & Mary. Want to thank you for being here, and look forward to our discussion. Our next witness is Anthony Qaiyum. He is the president of Merz Apothecary, a locally owned small business serving customers across the Chicago area and through its online store, smallflower.com, across the country. The Qaiyum family has owned and operated the business for decades, and under Mr. Qaiyum leadership, it has grown from a neighborhood apothecary into a nationally recognized destination for natural health, personal care, and specialty products. Mr. Qaiyum earned his bachelor's degree from Williams College, one of the great schools, I might add. And I look forward to your testimony, and thank you for you being here today. Our next witness is Mr. France Hoang. Mr. Hoang is the founder and CEO of BoodleBox, a collaborative AI platform that gives small business educators and workforce programs secure, affordable access to multiple premium AI models in a single workspace. Prior to starting BoodleBox, Mr. Hoang served as an executive officer of a U.S. Army Special Forces company during combat deployment in Afghanistan. Thank you for that. And he also served as Associate Counsel to the President under President George W. Bush. And he has been on the founding teams of companies across the fields of law, aerospace defense, government services, and AI. He earned a Bachelor of Science degree from the United States Military Academy at West Point. Beat Navy, right? And a law degree from Georgetown University. I want to thank you for being here today, and look forward to our discussion. I now recognize Congressman Cisneros from California to briefly introduce our last witness appearing before us today.

Rep. Gilbert Cisneros (D-CA)SPEAKER_16

Thank you, Mr. Chairman. It's my honor to introduce Mr. Chike Aguh, the head of innovation and strategy at the Kapor Center, a tech policy group focused on making the tech industry more diverse, equitable, and inclusive. He is also the vice chair of the Maryland Higher Education Commission. Previously, Mr. Aguh was the Chief Innovation Officer at the last administration's Labor Department. While there, he led efforts to use big data and emerging tech to empower and protect American workers. Mr. Aguh also has extensive experience in private industry, broadband access, nonprofits, and the education system. He holds a bachelor's degree from Tufts, master's degree in education and public administration from Harvard, and an MBA degree from University of Penn, Wharton. A lot of education there. Thank you for being with us, Mr. Aguh.

Chairman Roger Williams (R-TX)SPEAKER_17

Gentlemen, yields back, and thank you again, all of you, for being here today. Now, before recognizing the witnesses, I'd like to remind them that their oral testimony is restricted to 5 minutes in length. That's a big number around here, 5 minutes, okay? And if you see the light turn red in front of you, it means your 5 minutes has concluded and you should wrap up your testimony. If you continue to go, you will hear this, okay? And it'll get louder and louder. So, so I now recognize Mr.— and I will say one other thing, too. You're going to see members going in and out. It's not because of anything you said or did. We have other hearings going on, so there'll be people coming in and out all the time. I now recognize Mr. Crenshaw for his 5-minute opening remarks.

Mr. Jordan CrenshawSPEAKER_19

Chairman Williams, Representative Cisneros, and distinguished members of the committee, thank you for the opportunity to testify today on how artificial intelligence is shaping the future of small business. My name is Jordan Crenshaw, and I serve as senior vice president at the U.S. Chamber of Commerce, where I lead the Chamber's technology policy work, including artificial intelligence, data privacy, and emerging technologies. For small businesses, AI is not a distant idea. It is already helping Main Street businesses save time, serve customers, manage costs, and compete with larger firms. Tools that once required large budgets and dedicated technology teams are now available to entrepreneurs, family-owned businesses, and small employers across the country. A retailer can use AI to understand demand and personalize marketing. A restaurant can improve scheduling and inventory. A professional services firm can automate routine drafting and research. A manufacturer can reduce waste and improve operations. In each case, AI is a force multiplier that helps small businesses do more with limited time, staff, and resources. The AI adoption trend is clear. According to the U.S. Chamber's Empowering Small Business report, in 2025, 58% of U.S. small businesses reported using generative artificial intelligence. That's up from 40% in 2024 and 23% in 2023. That growth reflects a simple reality: small businesses adopt technology when it delivers practical value. One example is Henry's House of Coffee in San Francisco, a family-owned roaster that has served its community for generations. Its owner, Hrag Kalebjian, uses AI to improve online product descriptions, better understand customers, and solve production challenges. He even used AI to help design a custom system to address static in his coffee bagging process, which actually helped him save time on getting coffee outside of his e-commerce platform and to customers. That is what AI adoption looks like on Main Street: practical, entrepreneurial, and focused on solving real problems. AI is also creating workforce opportunities. The Chamber's data shows that 82% of small businesses using AI increased their workforce over the last year. These businesses are not using AI to replace people. They're using it to help employees focus on high-value work that requires judgment, creativity, and relationships. Small businesses are also investing in their workers. They need accessible training, strong partnerships, and policies that make adoption easier, not harder. It's one reason that the U.S. Chamber and its foundation launched the Small Business AI Basics program recently to train 40,000 small businesses across the country on AI. We also support the AI for Main Street Act and the AI WISE Act, both of which would help put practical AI guidance and education within reach of more small businesses. At the same time, barriers remain. Small businesses face cost, technical, data readiness, trust, and legal uncertainty challenges. The greatest policy threat in front of small businesses is a patchwork of state AI and privacy laws. A small business selling online should not have to navigate dozens of conflicting state rules simply to use common digital tools. Congress should establish a clear national framework for data privacy and AI. These frameworks should protect consumers, promote trust, preserve innovation, and provide strong federal preemption. A first step is that Congress should pass the Secure Data Act. The Secure Data Act is a comprehensive privacy legislation that is based on a consensus of state privacy laws signed into law by 10 Democratic governors and 15 Republican governors that protects over 150 million Americans across the country. It would give Americans the right to delete their data and opt out of certain AI profiling. With regard to AI specifically, we should adopt a risk-based, technologically neutral, flexible, and proportionate framework. Congress should also support the foundations of AI adoption: workforce development, broadband access, reliable energy infrastructure, modernized permitting, government technology systems that reduce burdens on small businesses like streamlined permitting. The question before this committee is not whether AI is going to change small business. It already is. The question today is, what policies can Congress put in place that encourage the adoption of this technology and further maximize this transformation to benefit small businesses? With the right approach that provides flexibility, certainty, and a clear standard, AI can help entrepreneurs grow, compete, and serve their communities. The Chamber stands ready to work with this committee to ensure that AI works for Main Street, strengthens American competitiveness, and keeps the United States at the forefront of innovation. Thank you, and I look forward to your questions.

Chairman Roger Williams (R-TX)SPEAKER_17

Gentleman yields back. I now recognize Mr. Qaiyum for his 5-minute opening remarks.

Mr. Anthony QaiyumSPEAKER_05

Chairman Williams, Representative Cisneros, and members of the House Small Business Committee, thank you for the opportunity to testify today about how artificial intelligence is helping small businesses like mine compete, grow, and create jobs. My name is Anthony Qaiyum, and I'm the owner of Merz Apothecary, a 151-year-old family-owned business in Chicago. We sell natural health, personal care, beauty, and fragrance products through our historic retail store, our website, and online marketplaces like Amazon. Altogether, we employ more than 60 people. When I started, I believed technology could help our unique neighborhood store reach people across the country and around the world. We launched our first e-commerce website in 1997 and became one of Amazon's earliest small business sellers in 2004. Looking back, those decisions changed the trajectory of our business. Today, I believe artificial intelligence represents the next major leap forward for small businesses. AI gives businesses like ours affordable access to capabilities that were once available only to large corporations with multimillion-dollar budgets. Many of these tools offer free versions or are integrated into existing platforms we use. For example, Shopify's native AI can produce on-demand sales reports in just minutes that used to take hours to build. Over the years, we've accumulated decades of emails, spreadsheets, sales records, and operating documents in Google Workspace. We can now simply ask Gemini where something is stored and what it says, turning our historical institutional knowledge into something we can find and use instantly. In addition, AI helps us streamline repetitive administrative work so our employees can spend more time serving customers. Right now, we're building an AI agent to handle routine accounts payable work that takes one employee more than 20 hours a week—hours we'd rather have her helping with strategic problems to grow our business. Like many small businesses, we don't have the budget to hire a full-time chief financial officer. But today, I can securely upload our financial statements into AI tools like Claude or Gemini and receive a thorough analysis of cash flow, inventory, investments, operating expenses, payroll trends, and potential financial risks. Lastly, and perhaps my favorite example of how AI is helping us, we recently hired a national sales manager for Kobo, our small home fragrance manufacturing business. This is a new position. I knew what I wanted her to learn during the first few months, but I didn't have the time to organize everything into a structured onboarding program. Using AI voice transcription and writing tools, I talked through my ideas, and the AI turned them into a comprehensive knowledge guide along with a detailed 30-60-90-day onboarding plan. She later told me it was the clearest roadmap she'd ever received when starting a new job. All these examples illustrate the larger impact AI has had on our business. It has helped us make better use of our employees' time, strengthen our operations, and grow. Since we started using AI, our headcount has increased by about 20%, from just over 50 employees to more than 60, and we are still hiring. As Congress considers AI policy, I urge you to focus on measures that help small business adopt and benefit from AI-powered tools. First, we need a clear, balanced national framework rather than a burdensome patchwork of conflicting state AI and privacy laws. Navigating different rules across all 50 states is difficult at best and expensive or impossible at worst. Second, AI-powered tools are just becoming affordable and accessible for businesses like mine, from features built into platforms like Shopify to stand-alone tools like Claude and Codex. If new rules make these tools more expensive or harder to use, it could push AI-powered technology out of reach, once again making these capabilities available only to the largest companies. Lastly, Congress should invest in AI literacy. SBA programs, tax incentives, or workforce training initiatives could help small business owners and their employees learn how to use these tools effectively. Every employee who becomes proficient with AI becomes more valuable, more productive, and better equipped for the jobs of the future. Even in our business, which is embracing AI, many of our employees lack formal training on how to maximize its potential. With the right support, more small businesses could help their workers use AI confidently. For 151 years, Merz Apothecary has adapted to changing technologies and markets. AI is the newest chapter in that story. It is helping us compete, innovate, hire, and better serve our customers. I hope Congress will pursue policies that keep AI tools accessible for American small businesses and make it easier for millions more to adopt them. Thank you, and I look forward to your questions.

Chairman Roger Williams (R-TX)SPEAKER_17

The gentleman yields back. And I now recognize Mr. Hoang for his five-minute opening remarks.

Mr. France HoangSPEAKER_11

Thank you, Mr. Chairman, Ranking Member Cisneros, members of the committee, thank you for inviting me here today. My name is France Hoang. In 1975, when I was a small boy, American forces evacuated my family from Vietnam. That single act gave me a new life. It let me graduate from West Point, serve as an associate counsel to the president, and later deploy to Afghanistan as the executive officer of a Special Forces company. It also let me become an entrepreneur. Over the past 15 years, I helped start a law firm, Fluet, a defense services company, MAG Aerospace, and today I run a collaborative AI company, BoodleBox. Today, more than 130 small businesses run on BoodleBox, and over 100,000 students and faculty at more than 1,000 colleges use it to teach and learn. Together, the companies I founded employed more than 1,200 Americans. So when this committee talks about small business, I have lived that journey multiple times. This committee has also has already done real work to help small businesses through bills like the AI Main Street Act and the AI WISE Act. That work matters. But I've learned something on the ground. Getting access to AI is no longer the hardest part. Basic AI is cheap and it is everywhere. A small business owner in Detroit can reach more AI computing power today for almost nothing than a Fortune 500 company could buy 5 years ago. The trouble is what comes next. The premium AI that delivers real results still costs real money, and a new divide is opening up between Wall Street and Main Street. There's a second problem, and it is bigger. The most powerful AI is useless if you don't know how to use it well. Most small businesses today are handed the keys to a Ferrari and sent down the equivalent of a muddy road. Too often, what comes out only looks finished, and when someone has to redo it, it's what now we call work slop. On Main Street today, and even more so tomorrow, the businesses that do not learn how to collaborate with AI will not just fall behind, they will fail. When I sit with small business owners, I hear the same things over and over. They're exhausted, they don't have time to learn new tools, they don't have staff to run them, and they don't have a budget to hire help. And they fear that once their data goes into AI tools, it stops being theirs. They are right to be careful. It's one of the reasons we built BoodleBox to be private by design. Not only do we have best-in-class security, but we never allow our customers' data to be used to train AI models. In fact, we are one of the few platforms approved by the House's own Chief Administrative Officer for use by your staff. A small business owner deserves the same assurances. I have seen what this looks like when it's done right. The University of Michigan runs the Detroit Neighborhood Entrepreneurs Project. It serves more than 400 small businesses a year. More than 9 of— 9 in 10 of them are minority-owned. Last year, they put BoodleBox in the hands of all those entrepreneurs with the coaching to use it well. One of them is Takiyah Gaines, who runs a company called GT Coffee. Through BoodleBox, she picks the right AI model for each task—one to price her products, another to build her marketing. As a result, her average order has grown from $38 to $47. AI let her grow before she had the resources to hire. She didn't outsource her judgment to AI; she amplified it. I'd like to leave you with three requests. First, fund the roads, not just the cars. Put training and real support behind the small business development centers that the committee has already strengthened with the AI for Main Street Act. Second, protect small business data so no owner fears that using AI means giving their work away. Third, take care that the rules meant to do good do not wall out the small. Compliance that only the giants can afford will hand this technology to big companies and lock out those who need it the most. Throughout its history, America has provided opportunities that let small business owners thrive and prosper. In this era of rapid change due to AI, it's our responsibility to ensure that those opportunities not only remain, but expand. To do so, we must not just hand small business owners a faster car. We must help them build better roads, better roads worth driving on. Main Street, I guarantee you, will take it from there. Thank you. I look forward to your questions.

Chairman Roger Williams (R-TX)SPEAKER_17

Thank you. And the gentleman yields back. I now recognize Mr. Aguh for his five-minute opening remarks.

Mr. Chike AguhSPEAKER_04

Good morning, Chairman Williams, Ranking Member Cisneros, and members of the committee. I want to thank you for this invitation to testify today, and I will say, as a former congressional intern who walked these halls two decades ago, it is a remarkable full circle moment and very much proof of what's possible today in America. My name is Chike Aguh. I serve as head of innovation and strategy at the Kapor Center, and through the Kapor Foundation and Kapor Capital, the Kapor Center has backed more than 200 startups and fledgling businesses since 2011 that make healthcare, childcare, education, and housing more affordable today in America. Few topics matter more than the intersection of artificial intelligence and the small businesses that power this nation. If you remember nothing else I say today, remember this: the rise of AI carries both promise and peril. They are both real. Our shared responsibility is to capture that promise and mitigate that peril. For small businesses, the promise of AI is very clear. Generative AI and AI agents can remove many of the very barriers that prevent entrepreneurs from starting and scaling businesses, from market research to back-office capacity to navigating regulation. Last year, Matt Rosenberg in California left his marketing job to open a Thai restaurant with his wife, a fourth-generation cook from Bangkok. When a storefront lease proved unaffordable, AI surfaced a rare home kitchen permit they never knew existed, cutting their startup costs by more than 90%, and turned dense regulations into simple checklists. This February, Bangkok Rush Thai Kitchen opened in Alameda, California, about 12 minutes from our home office. And when Matt was asked what he would have done without AI in this situation, he simply said, I would have just given up. Matt's story captures the promise of AI: making entrepreneurship possible for all, not just for some. But the peril is just as real, and it's threefold, and it's important to name. First is trust. Right now, AI adoption—and there are ranging definitions and estimates of adoption—varies across small business, and it's nowhere near where I think we want it to be. And I think what we like to say at the Kapor Center is technology moves at the speed of innovation, but adoption moves at the speed of trust. And right now that trust is still being earned by this technology in the marketplace. Secondly, concentration. If AI and the knowledge of how to use it is only concentrated in the largest firms, the gap with Main Street is going to only widen. Lastly, and third, fitness for purpose. If these systems are unreliable or poorly governed, then small businesses are left to navigate these risks alone, unable, as former White House Deputy National Cyber Director Camille Stewart Gloster has warned, they would be unable to protect their intellectual property, their consumers, or their competitive advantage. So, the promise or the peril: which will we live into? It is easy to feel like this will happen to us, but at the Kapor Center, we like to echo President Kennedy, where he says, Things do not happen. They are made to happen. And so, for the future that we want, how do we make it happen? And we would say that there are four parts to that answer. First, we have to ensure that small business leaders have both AI literacy and practical guidance on where AI creates the most value. The bipartisan AI WISE Act and the AI for Main Street Act are promising first steps, and we hope they are only the beginning. Second, we must help firms build AI-ready workforces. An AI-ready workforce is one that is not just AI literate, but AI native: fully comfortable working alongside these tools, but also strengthening their unique human skills that AI for now cannot replace: leadership, communication, interpersonal connection, and judgment. Third, we need a national framework for AI governance. We believe common sense guardrails, like those in the AI Civil Rights Act, which we endorse, build trust by preventing unlawful AI discrimination, requiring transparency for critical uses, and providing real accountability. We also need consistent rules of the road on security, privacy, and intellectual property so that entrepreneurs—and this is what's so important—can spend their time serving customers and not navigating AI risk. Fourth, government must be a partner and a pioneer, not a barrier. Governments should show the way by partnering directly with AI-native companies to solve societal ills and take down the bureaucratic barriers that 6% of these companies say are barriers to their scale and to them serving communities. If those partnerships could happen and just make a 2% improvement on many of the nation's biggest challenges, we could unlock over $100 billion of GDP for this nation every year. At the Kapor Center, we believe that America is stronger when there are more entrepreneurs in it, not fewer. We must listen to them, make sure these solutions reach them regardless of who they are and where they live. If these solutions that you are debating here are not felt in places like my home county of Prince George's or El Paso, Texas, or Appalachia or the Ozarks, we will not get the next generation of small businesses. And so I want to thank the committee for having me. I want to start that we believe this is—and say this is a time of great promise and peril, and that we believe this future will not just happen, it'll be made to happen. Thank you so much.

Chairman Roger Williams (R-TX)SPEAKER_17

Gentleman yields back, and we will now move to the member questions under the 5-minute rule. I'll recognize myself for 5 minutes. Mr. Qaiyum, Merz Apothecary has been a fixture on the Chicago street corners, as you said, for 150 years, but through smallflower.com, you're now competing nationally, managing a catalog of more than 14,000 products with a staff of around 50. And as a national retailer would have entire departments handling that kind of merchandising, product discovery, and online marketing, can you walk us through, briefly, AI has let your team take on that used to require the resources of a much larger company, and where has it closed the gap with larger competitors, and where does it still fall short?

Mr. Anthony QaiyumSPEAKER_05

Yes, thank you for the question, Chairman. You know, when you're running a small business, as I've done for about 28 years, and I've worked in the corporate world, in the corporate world, you have departments who can, you know, department for every task. And in our business and in most small businesses, 1, 2, a small handful of people are wearing all of the hats across that would fall across a much larger corporation. So for us, the way we use AI is often I think of it as we're looking for ways that we can take the simple work and the tasks away that we have to do so that we can focus on the deeper work that helps our business grow. So that might be like the example I gave, matching bills to invoices, which is obviously important and we can't exist if we don't do that. But it isn't necessarily the best use of a human's time because we have a lot of other things to do. So that would be a simple example. And then in marketing, you know, nowadays we're able to test our marketing across the country to all types of segments. And then we used to sit there and think, should we test this ad for this segment in this part of the country or for this group of people? And it isn't really realistic to, to do all of the testing you need to do to succeed as a small business. So now we're able to use the AI to test across a lot of different creative and target customers, and it's been a huge help for us. Those are 2 examples.

Chairman Roger Williams (R-TX)SPEAKER_17

Thank you. Mr. Crenshaw, research shows that nearly 3/4 of small businesses are now using AI, but the headline number surely hides a lot of variation. Question is, how representative is that data across different sectors and regions, and what separates the small businesses that are successfully adopting AI from the ones falling behind?

Mr. Jordan CrenshawSPEAKER_19

As we look at the data, 58% of small businesses, according to our survey nationwide, are using generative artificial intelligence. Now, if you look at the higher adopters, that tends to be smaller tech firms. It's around 70% adoption rates at that point. Entertainment companies that are smaller, it's around 65%. But then when you dig down on the numbers, you still have about half of retailers, restaurants, traditional brick-and-mortar companies are using generative artificial intelligence to grow and thrive. In fact, had a chance to talk with the owner of a skincare company in the Coachella Valley who has been able to use generative AI to help her cut costs by sourcing products from places with lower tariffs or lower costs due to inflation, so she doesn't have to pass those costs on to consumers. And so it really is a mix of the type of companies that are using this across all sectors. But at the same time, what we have found, though, of the companies that are not using generative artificial intelligence, about a third are worried about the regulatory uncertainty that's out there. About one in five believe that they can't find the workers who are properly trained at this point to actually use generative AI and make it work for them. And then another third are really still not sure how it will work for their business. So it's one of the reasons why it's so critically important that we establish clear national frameworks on the regulatory side, like the Securing Data Act on data privacy, create a national AI framework that's workable, and we also have training programs in place, like the AI for Main Street Act and the AI WISE Act, that help small businesses really get their head around how to use small business or AI responsibly.

Chairman Roger Williams (R-TX)SPEAKER_17

Mr. Hoang, in the short time that I've got left, from your work with BoodleBox, what does AI literacy really realistically look like for a typical Main Street owner and their employees? And how can platforms like yours and the broader training ecosystem help them build those skills in a way that supports running the business rather than becoming another burden on their time?

Mr. France HoangSPEAKER_11

Yeah, very briefly. Thank you, Mr. Chairman. I think AI literacy has 3 components. First, domain expertise. You have to know what questions to ask, what context to provide, evaluate— be able to evaluate AI outputs. Second, AI enablement, knowing when and how to use AI. Not every problem requires an AI solution, but if it does, what are the tools and how do I use them responsibly? And third, I would argue that in this era of AI, the things that make us uniquely human are more important than ever: critical thinking, collaboration, communication, creativity. And so those combination of those 3 things are what we need for today's workforce.

Chairman Roger Williams (R-TX)SPEAKER_17

Okay, thank you. My time is up. I now recognize the ranking member for 5 minutes of questions.

Rep. Gilbert Cisneros (D-CA)SPEAKER_16

Thank you, Mr. Chairman. You know Many of my colleagues and I were deeply concerned when we saw the president's executive order on AI published in December. There are several concerning elements to this executive order, but the most concerning is a requirement by establishing a uniform federal policy framework for AI that preempts state laws on AI as well as data centers. I support strong federal AI regulation, and I think it's important that we have that, but I am worried that this EO punishes states like California, my home state, that are proactive and forward-thinking enough to harness the benefits of AI while also creating guardrails against potential harms, especially because this EO removes all state laws without putting any safeguards in place. Mr. Aguh, can you share why preempting state AI laws can be harmful without any strong regulatory safeguards?

Mr. Chike AguhSPEAKER_04

Sure, Congressman. Thank you so much for the for the question. And I think for us at the Kapor Center, we very much think the best way forward is a single national framework for AI governance. In lieu of that, we do not think the best approach is no regulation. We believe that right now, if I cannot have national regulation, then someone needs to step in. And right now, states are stepping forward to create those safeguards. One can argue how optimal that is, but we would say it is more optimal than having no regulation or protection whatsoever, particularly for this topic that we're talking about today. If you talk to many small businesses about why they may not be adopting, it's because they are unclear about what the rules of the road are and what protections exist for them, whether it be around their data, around their security, around civil rights. And having those rules, even if they're state-based rules, can actually be a tool to increase trust, which can increase adoption, which I think we've all said on this panel is to the benefit of small businesses in their communities.

Rep. Gilbert Cisneros (D-CA)SPEAKER_16

Yeah. And like you said, the trust is the important thing, right? That's what's going to allow more people to use this tool. So, Mr. Aguh, in your testimony you said government should be a partner, not a barrier. Rep. Jack and I introduced the SBA IT Modernization Reporting Act to address challenges at the SBA in carrying out IT projects that support small businesses. I'm glad to hear it unanimously passed the House and now a Senate companion is being introduced. How counterproductive can it be to small businesses if government agencies like the SBA improperly utilize AI?

Mr. Chike AguhSPEAKER_04

Again, Congressman, thank you so much for the question. And it can be harmful in two ways. One, the government is, in some ways, an influencer and a leader for so many other types of industries across the country. When there are misuses at the federal level, it can potentially, frankly, incentivize and almost create co-signing for those misuses in others. That's one. Two, when there are bad effects of those misuses, it creates a chilling effect for other folks who may want to partner with AI-native, AI-driven companies. And we think it's why the SBA, we want to be pioneering, but also strategic in terms of how they use it so that they can actually show the way for what right looks like, instead of highlighting what wrong can look like. And we believe if that happens, more small businesses will be able to do more at every level of government and at every sector to improve their communities and improve problems around the country.

Rep. Gilbert Cisneros (D-CA)SPEAKER_16

All right, thank you for that, Mr. Hoang. I loved your example about the University of Michigan and how they're teaching companies how to use AI. Moving forward, as you said, literacy is very important. What role should the SBA play in this when it comes to literacy, AI, ensuring that small businesses know how to use these tools and use them properly to their benefit?

Mr. France HoangSPEAKER_11

Yeah, as we saw in places like Detroit, when you combine access to the tools with the training and coaching to use them well, that's when you see results. The SBA obviously has the resources and the reach to provide that type of training and resources. Obviously, private industry has a role to play as well, but the reach of the government is much greater, and particularly in urban America, in downtowns, in the far reaches past the last stoplight of rural America, I think the SBA can really make an impact in terms of providing resources necessary for the responsible and collaborative use of AI.

Rep. Gilbert Cisneros (D-CA)SPEAKER_16

Mr. Crenshaw, same question to you. What role should the SBA play in AI literacy?

Mr. Jordan CrenshawSPEAKER_19

We believe that SBA should play a fundamental role in AI literacy. It's one of the reasons why we support the AI for Main Street Act and the AI WISE Act,

Rep. Gilbert Cisneros (D-CA)SPEAKER_16

All right. Thank you. With that, Mr. Chairman, I yield back.

Chairman Roger Williams (R-TX)SPEAKER_17

The gentleman yields back. I now recognize Ms. Van VanDuyne from the great state of Texas for 5 minutes.

Rep. Beth Van Duyne (R-TX)SPEAKER_15

Thank you very much, Mr. Chairman. You know, small businesses really do drive the economy, I'd say throughout the country, but especially in North Texas. And AI seems to be giving entrepreneurs new tools that were once out of reach for all but the largest of companies. It's helping owners save time, make better decisions so they can focus more on serving customers and growing their businesses. And on this committee, we are working alongside the Trump administration to remove a lot of the barriers and to help small businesses to put these tools to work. Washington should be building on that progress without creating new uncertainty or unnecessary costs for our small businesses, so that businesses of every size can benefit as America continues to lead in AI. Mr. Crenshaw, AI is already helping small businesses compete with much larger firms. Washington needs to be careful, as I mentioned, not to regulate away that advantage. But at the same time, business owners need confidence that their customer data, the financial information, proprietary work are secure. So as we consider some of these privacy concerns, what do you think that we should be looking at first, and how can we address real risks without creating new compliance burdens that will make AI less accessible to Main Street companies?

Mr. Jordan CrenshawSPEAKER_19

It's an excellent question, and there's a reason that Texas small businesses are using AI. 86% of them grew their workforce, the ones who used it. But they have concerns. 62% of Texas small businesses are worried about a patchwork of state AI and privacy regulations creating an environment where small businesses incur the costs and don't reap the benefits and can't compete with larger companies. I think there are really two things that really can be helpful in creating a regulatory environment for AI. One is passing national data privacy legislation. The Secure Data Act is currently in front of the E&C Committee right now. It is legislation that is based in large part on the Texas Data Privacy and Security Act, and also along with 19 other states across the country as a model for privacy legislation that would put consumers in charge of their data and give them the right to delete it, correct it. But at the same time, we also do need a national AI framework as well that prevents a patchwork from emerging. And I think as we look at that, one of the first things we have to do is address: where is AI already regulated? We need to do a gap analysis to see where the laws can already play a role in protecting people. We already have laws on the books that protect against discrimination, privacy in over 20 states, consumer protection laws in 50 states. We have an FTC Act that protects consumers on a national level. And then at that point, there needs to be a real discussion about a risk-based framework that's targeted and tailored for those areas of harms where the law has not caught up with the technology. One example of that is the Take It Down Act, which was signed into law, which would have criminalized the distribution of deepfake revenge images and also given consumers a right to take that—those images off websites and off the internet. So that's really where we feel a balanced approach is. And I think as we look at AI regulation, it's important to note, even if there is preemption of specific AI regulations across the country, there's still a backstop of these laws of general applicability, like consumer protection, discrimination, and privacy.

Rep. Beth Van Duyne (R-TX)SPEAKER_15

I appreciate the answer, by the way. I've asked a number of CEOs and founders of some of the largest AI companies, and that was the best answer I've gotten. Very complete and well thought out. I appreciate that. Mr. Hoang, in your testimony, you discussed the importance of both proprietary and open models to small businesses, including the importance of open models due to cost. Can you kind of expand on the current state of the closed and open model ecosystem and how small businesses use both types to operate and build their businesses?

Mr. France HoangSPEAKER_11

Yeah, to be clear, I'm neither pro-open or anti-open or pro-closed or anti-open model. I believe in choice. Choice provides competition. It provides the consumers the opportunity to use the models that are best. We obviously are familiar with the closed models that are kind of on the frontier edge. There's also a number of open models that are very close. They're driving down the cost to access these capabilities. I built my platform on this idea of choice. You can choose what models you want to use, and collaboration so you can get the best of models working together. I think we need more competition in the sense of more access to both closed and open models so consumers can let competition do what it does best, which is produce the best products and services for America.

Rep. Beth Van Duyne (R-TX)SPEAKER_15

I appreciate that very much. And with that, Mr. Chairman, I yield back.

Chairman Roger Williams (R-TX)SPEAKER_17

The gentlelady yields back. I now recognize Mr. McGarvey from the great state of Kentucky for 5 minutes.

Rep. Morgan McGarvey (D-KY)SPEAKER_10

Thank you, Mr. Chairman. Thank you, Mr. Chairman, for having this hearing today. I think it's incredibly important for us to be talking about AI as it relates to small businesses. As you all have pointed out, AI is not something that's coming; AI is here. We see it right now in Louisville, Kentucky. I see businesses who are successfully using AI in a lot of the ways you all described, right, which is actually taking some of the more—the tasks that take hours upon hours upon hours to do and then freeing up their employees to actually do the work that is central to the business. So, see a lot of good applications. Have a lot of questions too, right? And see a lot of fear from people who are afraid that AI is going to take their job entirely. This is the kind of thing where AI, could quite literally cure cancer or potentially be used to develop a type of biological weapon. It's the type of thing where AI can be used to help spur creativity, but we don't want to see it ripping off the beautiful sound of someone's voice, or taking the hard work and creative energy that goes into music and products, and taking that and taking it away from us. How do we replace, and how do we protect people whose livelihoods are easily replaced by AI? How do we balance the needs for privacy with the needs for safety and security? And you guys talked about some of these things. So, at the root of each of these questions, I think, is what I spend the most time thinking about when we think about AI right now: How do we make sure that AI is used for good? And this is something that I think is really important work of this body right now. And Mr. Crenshaw, I'm going to start with you, because you testified before the Science Committee all the way back in 2022 about the ethical development of AI. And I am not being facetious when I say all the way back in 2022. When we talk about AI, 2022 was a very, very long time ago. We could be talking about the beginning of this year, and it might be a long time ago in the way that AI is developing. But I want to hear a little bit more about this, and I want to hear from you. What do you think the role of Congress is in ensuring that we develop AI that is ethical, that does good and is used for good? And tell me in any way if some of your views have evolved since 2022.

Mr. Jordan CrenshawSPEAKER_19

It feels like a long time. A lot has happened. A lot has changed since I testified in front of the House Science Committee. We have now seen the rise of new types of AI, for example, and more news about frontier models and agentic artificial intelligence and the rise of chatbots over the last few years. But I think one of the things that has been helpful in government and was actually released during the Biden administration was the release of the NIST AI Risk Management Framework, which provides a great roadmap toward businesses of all sizes to examine and look at how they're using artificial intelligence to address risks to things like privacy and other potential harms that could come out. It's one of the reasons why the Risk Management Framework is iterative and meant to be reexamined to make sure that it is catching up with the technology. And that's exactly what's happening right now. NIST is currently reviewing and making changes to that Risk Management Framework right now. It's also putting out profiles for different use cases for artificial intelligence. For example, just recently in the last year, released a risk profile on generative artificial intelligence. It's now working on one on critical infrastructure. But it's also possible that NIST could also examine ways for small businesses to more easily look at how to use artificial intelligence in an ethical manner. So, that's a way government's already working. But at the same time, there are other things that we think that can be done. For example, Kentucky led the way on data privacy legislation. A supermajority of Republicans and Governor Beshear, a Democrat, enacted Kentucky's data privacy law, which has rights around AI. It has deletion rights. And we think that that is the right model for the United States in terms of passing national privacy legislation, which would be a building block to getting us to understanding how data can be regulated so then we can start looking at more of the broader AI pieces.

Rep. Morgan McGarvey (D-KY)SPEAKER_10

No, thank you. I appreciate you saying that. And this is one where I think all of us probably wish we had more than five minutes. And this is an issue I don't want to see get political, but you mentioned the importance of NIST. I have to point out that this administration, the Trump administration, has fired over 700 NIST employees, and the fiscal year 2027 budget request proposing 53% of that agency's funding. I think when we're talking about how do we use AI for good, how do we have this framework, an agency like that really is important for helping us develop those tools. I also appreciate you bringing up data privacy. Unfortunately, I am running out of time, but really appreciate you guys being here. Appreciate the information you provided. This is something that is going to be so necessary for small business, for everyone to be able to compete, for us to develop the right framework. So appreciate you guys being here. Mr. Chairman, I yield back.

Chairman Roger Williams (R-TX)SPEAKER_17

Gentleman yields back. I now recognize Mr. Alford from the great state of Missouri for 5 minutes.

Rep. Mark Alford (R-MO)SPEAKER_02

Well, thank you, Mr. Chairman. Good to see you and everyone coming in today to testify on this very important matter. Artificial intelligence is quickly transforming the way Americans live and work, and nowhere is that more evident than on Main Street, and that's what we're concerned about here in this committee. What was once viewed as a technology only available to the largest of corporations is now becoming available and affordable for small businesses all over our great nation. Whether it's helping a manufacturer optimize production, allowing a family-owned retailer to better manage inventory, improving customer service, or reducing the administrative burden on small business owners, AI is giving entrepreneurs new opportunities to grow, to innovate, and to compete. At the same time, many small businesses still face significant challenges when it comes to adopting these tools. Business owners often tell us that they don't know where to begin, that they worry about protecting customer data. Many simply lack the time or technical expertise to evaluate the growing number of AI products entering the marketplace. We here in Congress, I think we have a very important role to play to make sure that innovation is encouraged, not hindered by unnecessary regulation, while also making sure small businesses have access to the education and resources they need to use this technology wisely to grow their businesses. Mr. Crenshaw, I was proud to introduce the bipartisan AI for Main Street Act along with my colleague Representative Scholten, and this legislation would utilize the Small Business Development Center network to provide practical AI training, cybersecurity best practices, data protection guidance, and technical assistance. The House passed this bill by an overwhelming bipartisan vote because we recognize here in Congress that AI adoption is about more than simply providing access to technology. It's really about giving entrepreneurs the confidence to use it effectively. From your perspective, how valuable would this type of locally delivered technical assistance be, and what additional resources should Congress consider to make sure Main Street businesses can successfully adopt AI, sir?

Mr. Jordan CrenshawSPEAKER_19

Well, first and foremost, I want to thank you for your leadership and sponsorship of the AI for Main Street Act. It's a critical step to ensuring that small businesses know the tools available to them, know how to use them in a proper and ethical manner. And it's a reason why it's so important, as you look at your home state, 87% of Missouri small businesses using AI have grown their workforce. So this is why we need to get these kind of tools in front of them. So we think it's incredibly important that this bill pass in the Senate along with the AI WISE Act, and then also SBA has the funding it needs in order to successfully promote AI adoption for small business.

Rep. Mark Alford (R-MO)SPEAKER_02

Thank you, Mr. Qaiyum. A big concern that I've heard from our constituents when I'm doing town hall meetings or coffees with people in small businesses— we're in those small businesses regularly when we're back in our district. They're concerned about AI replacing employees, especially entry-level roles. In your experience, has AI replaced workers, or is it more of a tool to allow workers to be more productive and more competitive for those small businesses, competitive with the big guys?

Mr. Anthony QaiyumSPEAKER_05

Thank you for the question, Congressman. At Merz, in my experience, it really is a competition advantage, and I would say even more, it's a bandwidth advantage. And by that I mean, in my almost three decades running a small business, I've never felt that there was a lack of opportunity. There was just a lack of time, money, and resources to tackle the opportunity. So for me, it feels like what we've experienced is that using AI, my team is able to go after bigger opportunities and help our business grow, even the entry-level folks.

Rep. Mark Alford (R-MO)SPEAKER_02

Thank you. Mr. Hoang, last question: What are the biggest obstacles that small businesses face after they decide to use AI, and what has helped your small business customers turn AI from a project into an everyday business tool?

Mr. France HoangSPEAKER_11

Yeah, I would say, thank you for the question. 2 things. First, where to begin? AI, that chat window, can seem like a lot of promise if you are an AI adopter. For someone who's not familiar with AI, that seems like an ocean you get lost in. So it turns out AI is actually very good about teaching you about AI if you use it right. It's one of the interesting kind of components of the tool. The second is we hear a lot about prompt engineering and the need to be able to ask AI the right questions. In my opinion, what I've seen the most powerful use of AI, it's actually about context engineering. It's what you tell the AI before it gets started. And so educating business owners on how to use the context they're already sitting on. The customer data records, your past performance, your past contracts, and how to feed that into AI in a way that's safe, secure, and private that really unlocks the power and potential of AI.

Chairman Roger Williams (R-TX)SPEAKER_17

Thank you, and I yield back. Gentleman yields back. I now recognize Ms. McIver from the great state of New Jersey for 5 minutes.

Rep. LaMonica McIver (D-NJ)SPEAKER_00

Thank you, Chairman, and thank you, Ranking Member, for convening this hearing today. I want to thank each of our witnesses for joining us today on a heat wave here in Washington, D.C., so stay hydrated. Artificial intelligence is often described as a tool to help small businesses become more productive and reach new customers, but its value depends entirely on the safeguards we put in place. Today's AI systems still reflect deep biases, raise serious cybersecurity risks, and operate with little transparency. While large corporations use AI to strengthen their advantage, many small businesses are left behind. We are not doing nearly enough to ensure that small businesses can access and benefit from these technologies on fair terms. AI's rapid growth depends on the massive expansion of data centers, which place heavy burdens on local communities, local electricity grids, water supplies, infrastructure, and people, especially in my district in New Jersey's 10th. These projects often move forward with little transparency or input from the communities most affected. That is why I introduced my AI Data Center Site Selection Transparency Act, which would bring an end to surprise AI data center construction. If we are serious about encouraging innovation, we have to protect small businesses and communities that bear the cost of this transformation. Mr. Aguh, you spent a lot of time talking about this in your opening testimony, which I can appreciate, about how AI has some potential to increase productivity, but it also has millions of America's workers wondering what will happen to their jobs due to increasing AI use. I want to elaborate a little bit more of what one of my colleagues talked about, Mr. McGarvey, about America— Americans in the workforce and how AI impacts that. Mr. Aguh, how would small businesses, or how should small businesses think about using AI to assist their employees rather than replace

Mr. Chike AguhSPEAKER_04

First of all, Congresswoman, thank you so much for the question, and I think this is a place where I think history is helpful. If you think about in the past in the manufacturing space, and you think about when someone running a factory was trying to figure out how to make the line run faster, the first place they went was they went to their employees and said, You work on the line. Tell us how we can make this line 10% faster, 15% faster. And the workers generally delivered. And I think the same ethos is is is is important here when business leaders are implementing AI. One of the the people who must be intimately involved are the workers, particularly on the front line, who are using it. One, because that's ideally the types of workplaces that we want, but secondly, they have, in many ways, the best ideas for how to make sure that that that that AI can be used to actually create the efficiencies that we want. What can I take off my plate that'll make me better able to serve our customers, grow our business, serve our serve our community? So I think that's number one, include workers in that process. And usually when we talk about these firms, we're talking about 10 people, 20 people, many of which and and, in many ways, those relationships are already being created. I think the second piece is, and you've heard it I think across all the witnesses, which is we have to be investing in their skills now. Again, how do we make folks AI native so that they know how to use these tools the same way that we expect workers to be able to use Microsoft Office or Google Docs? Same way, this is going to become that level of table stakes. Therefore, how do we invest in that proactively now before it truly is a barrier to employment? I think the third piece, this is particularly true for small businesses, and you heard this from my example for Bangkok Rust Thai Kitchen, which is in many ways small businesses need to think about what is not happening in my business that AI can help make happen versus what is the thing that's happening now that potentially could could could be done by someone else. And when you have, again, businesses of 10 or 15 or 20 people, there are lots of things that aren't happening because they just don't have the arms and the legs to to do it. So those are the three things that that that I would say: include workers, make sure they're trained, and then thinking through strategically what's not happening in my business that AI could help make happen.

Rep. LaMonica McIver (D-NJ)SPEAKER_00

Got it. Thank you for that. And many of you, I think each of you actually talked about the need for AI literacy, right, for businesses. In your opinion, what investments in workforce training will be necessary to help workers adapt?

Mr. Chike AguhSPEAKER_04

I think it's two things. It fits into two buckets. One is just literally training folks on the tools, again, the same way that there are still classes that you can take on Microsoft Word and Excel. And you have much content out there, a lot of it either low-cost or no-cost, which is good. I think we particularly need to make sure this gets to the, frankly, the most in-need, underserved workers in the most underserved communities, whether those be urban or rural, because that's—because those are usually the folks who get that information last. I think the second piece, and I say this as someone who used to work at the Department of Labor, is how do we make sure that those human skills, again, leadership, communication, are emphasized? And that's where things like work-based learning are really important. You learn those skills not by hearing about them, learning about them, but you learn them on the job. So apprenticeships, hire to train, hire, train, deploy apparatus are really, really critical. So more work-based learning and then more targeted knowledge of how to use these tools.

Rep. LaMonica McIver (D-NJ)SPEAKER_00

Got it. Thank you so much for that. With that, Mr. Chairman, I'm out of time. I yield back.

Chairman Roger Williams (R-TX)SPEAKER_17

The gentlelady yields back. I now recognize Ms. King-Hinds from the Northern Mariana Islands, the great nor— uh, the great islands,

Rep. Kimberlyn King-Hinds (R-MP)SPEAKER_18

the amazing Northern Marianas. Thank you, Mr. Chairman. Mr. Tran, one of the things that resonated with me was your statement that, excuse me, that the tool is only the car, the road is training, coaching, and support. And as the chairman has mentioned, I represent the Northern Mariana Islands, and one of our biggest challenges is often just our remote geography and our very limited access to technical expertise. So if Congress could do one thing to ensure that AI doesn't widen the gap for remote, isolated communities like mine, what would that look like? What would that investment be?

Mr. France HoangSPEAKER_11

Thank you for the question. I would say obviously pass the two acts that came up from this committee, right, the AI WISE Act and the AI Main Street Act, that activates the SBA and the Small Business Development Centers to provide that training, expertise. And the government reach can reach all around the world, right, even to those territories and states that are further afield. So, I would say pass those acts, and second, continue to have these discussions, continue to have these hearings and bring businesses small and large. The world is changing fast. As one of the representatives noted, if we have this discussion six months from now, the world's going to be different.

Rep. Kimberlyn King-Hinds (R-MP)SPEAKER_18

Yeah, I agree. There's been a lot of— I think most of the panelists have touched on workforce development. And that's something I'm particularly interested in as this new technology continues to change on a daily basis, if not by by minutes, right? And I just kind of want to flesh out some of your thoughts on on what we should be doing in terms of investing to be able to prepare our workforce for this new technology. And I'll start with you, Mr. Crenshaw.

Mr. Jordan CrenshawSPEAKER_19

Well, I think it's important to note, too, in addition to AI training, as we are looking at building out the infrastructure for AI, we're going to need training in that as well, too. We've seen a rise in apprenticeship programs for things like electrical work to help out build out the infrastructure that's necessary for artificial intelligence. So it's a reason why many of the companies we work with are working to get people trained in those skills as well. But it's also fundamentally important that we have small business owners trained on how to use this technology. And that's one of the reasons why the Chamber launched its Small Business Basics program. But also, as we're looking at education, we need to begin developing programs where K through 12 has some degree of AI built into it, post-secondary education as well, too, building AI into those curricula and to an interdisciplinary approach in a lot of ways in higher ed. And so it really is going to be an across-the-board strategy necessary to ensure that we have an AI-ready workforce.

Rep. Kimberlyn King-Hinds (R-MP)SPEAKER_18

All right, thank you. Mr. Qaiyum, did you want to chime in?

Mr. Anthony QaiyumSPEAKER_05

Yes. Thank you. In my experience, right now we are we're probably more advanced than most small businesses of our size in using AI. But that's because I happen to be into technology, and myself and other leaders in our business have been pushing ourselves and our teams to do it. But even in our company, we feel like it's a challenge to get the rest of the company to adopt it. So I think that it is important to come up with programs, ideally through the SBA or other means, that help us train workers and let them experience the advantages that come from learning how to use these tools well.

Rep. Kimberlyn King-Hinds (R-MP)SPEAKER_18

Mr. Hoang, did you want to say something as well?

Mr. France HoangSPEAKER_11

Yes, thank you. We are privileged to work with almost 170 colleges and universities on their teaching and learning with and about AI. What artificial intelligence needs is more actual intelligence. And it's that combination that allows us to unlock its potential. If you think about the nature of work, right, defining a problem, designing a solution, creating that solution, validating it, AI makes those middle 2 steps easier and cheaper than ever. But the key isn't those 2 steps. The key is what comes before. Am I using AI for the right problem? And what comes after? Does this solution actually work in the real world? And so workforce readiness, maybe ironically enough, isn't about learning how to use AI and the tools. It's learning how to apply them to the real problems and to solve real problems in the world.

Rep. Kimberlyn King-Hinds (R-MP)SPEAKER_18

Mr. Aguh, you have the rest of my time.

Mr. Chike AguhSPEAKER_04

I think the only thing that I would add here is more real world. And you kind of heard it in the last answer, which is, again, for those of us who were athletes at any point in our lives, you didn't read a book on how to do a jump shot or throw a football. You did it in the field with a coach. And I think right now AI is ironically showing the need for more work true in the field, in the place of work, training and learning. So folks can learn to use these tools in real time. Classes are good. Real-life experience is better in terms of learning how to use these tools because they're evolving so fast. And so I think that is the only thing I would add here, which is how do we make sure that people, particularly young people, are getting to use these in the field, not just in a classroom?

Rep. Kimberlyn King-Hinds (R-MP)SPEAKER_18

Thank you. I yield back, Mr. Chair.

Chairman Roger Williams (R-TX)SPEAKER_17

Gentlelady yields back. I now recognize Mr. Tran from the great state of California for 5 minutes.

Rep. Derek Tran (D-CA)SPEAKER_03

Thank you, Mr. Chairman and Ranking Member, and thank you for our witnesses for being here. AI is no longer a technology of the future. It is already changing how Main Street does business. From helping a family-owned business manage inventory to allowing a new startup to reach new customers, AI has the potential to make small businesses more productive and more competitive if we use it well. As someone who represents Southern California, I see both the promise and risks every day. LA County and Orange County are home to a booming AI and tech innovation ecosystem, and also home to thousands of immigrant-owned small businesses that are worried about what AI means for their livelihoods. There's a broad, bipartisan agreement that America should lead the world in AI innovation, but leadership also requires rules of the road. That's where Congress has fallen short. We still don't have a clear national framework for AI governance and that addresses safety, innovation, and equal opportunity. Indeed, access to AI is not equal. In many minority communities, access to high-speed internet, modern devices, digital skills, and language-accessible tools remain uneven. This digital divide simply does not disappear during time of rapid AI adoption. It deepens. This is why AI literacy must become a national priority. Small business owners should know not only how to use AI, but also how to identify its risks, protect sensitive business data, recognize bias, and make informed decisions about when AI should and should not be used. That education has to reach every community, including immigrant entrepreneurs who are often among the most innovative small business owners in the country. The largest corporations already have the resources to adopt AI, manage compliance, and pay for future subscription costs. Many small businesses do not. If we fail to close that gap, AI could accelerate market concentration and leave Main Street struggling to compete. We need to make sure that this doesn't happen. Congress needs to invest in AI literacy and establish thoughtful federal guardrails to ensure that AI becomes a tool for innovation and opportunity, and not another barrier to success. Mr. Hoang, given your background, we both know the opportunities that this country provided our families, and we both chose to give back through military service before pursuing entrepreneurship. Your story is a powerful reminder of what the American Dream can look like. In your testimony, you make an important point that the challenge today isn't only access to AI, it's also readiness. You say many small business owners have been handed the keys to a Ferrari and sent down a muddy road. I never got that Ferrari key, by the way. But can you explain how important AI literacy is for consumer and entrepreneurs?

Mr. France HoangSPEAKER_11

Thank you, Mr. Tran, and I appreciate your service as well, given our shared heritage. Let me just draw that analogy a little wider. So we tend to think of AI like a faster car. Let's just do whatever we're doing today and just do it faster and better with AI tools. But if you think about it, a car is not just the faster horse, all right? A car requires first infrastructure, it requires training, it requires rules of the road. A car requires you to build the roads that can handle how fast the car can go. And most importantly, a car can go to places Horses can't. And so in many institutions, organizations, public and private, we treat AI like a faster car. We simply do what we were doing before, just do it faster. I would argue the key to AI adoption and the key to AI in small businesses is to rethink the roads, to ask ourselves, where do we want to go? And it may be a place we could not go to before. It may mean that a business that didn't have access to marketing tools because they couldn't afford it now all of a sudden does. It may mean that a business that couldn't expand its market could. AI enables these new opportunities, but only if we build the better roads, only if we build the privacy, the data protections, only if we provide the training, and only if we ensure that the regulatory environment doesn't overly burden small businesses compared to large businesses.

Rep. Derek Tran (D-CA)SPEAKER_03

Let me follow up and ask you, is AI literacy a challenge right now in this country?

Mr. France HoangSPEAKER_11

Yes, it is absolutely a challenge.

Rep. Derek Tran (D-CA)SPEAKER_03

Can I ask all the panelists going down, starting with Mr. Crenshaw, if you agree?

Mr. Jordan CrenshawSPEAKER_19

Yes.

Mr. Chike AguhSPEAKER_04

Yes. Absolutely, yes.

Rep. Derek Tran (D-CA)SPEAKER_03

Okay, then let me follow up with this. Should there be a dedicated funding, federal funding, to help bolster AI literacy nationwide? And let's go down the panel. Mr. Crenshaw.

Mr. Jordan CrenshawSPEAKER_19

We should have public-private partnerships that work together.

Rep. Derek Tran (D-CA)SPEAKER_03

Accept that.

Mr. Anthony QaiyumSPEAKER_05

I'm not an expert on how it gets done, but I know we would appreciate it in our business.

Mr. France HoangSPEAKER_11

Same answer here. I believe public-private partnerships and from a wide variety, wherever we can get AI literacy.

Rep. Derek Tran (D-CA)SPEAKER_03

Mr.

Mr. France HoangSPEAKER_11

Aguh? Yes, but we will need public investment.

Rep. Derek Tran (D-CA)SPEAKER_03

Okay. Thank you very much. And Chairman, I yield back.

Chairman Roger Williams (R-TX)SPEAKER_17

Gentleman yields back. I now recognize Mr. Fuller from the great state of Georgia for 5 minutes.

Rep. Clay Fuller (R-GA)SPEAKER_07

Thank you, Mr. Chairman. Mr. Hoang, and Mr. Crenshaw, you may weigh in on this, too. So, my wife is a small business owner. I'm a prosecutor by trade. So, if you remember the old caveman lawyer, your AI world frightens and confuses me. So, one of my concerns for small businesses on Main Street and the Appalachian communities that I represent is no different than the software you may use in a business. Someone will sign a contract and then maybe a year or two years into it, maybe it's not delivering. I think you used the term AI adoption. Maybe it's not what they needed. How can we create an industry and framework to make sure that for that AI adoption on Main Street, that these businesses have the opportunity to get the AI that they need to actually grow their business and not get into a 24-month contract for something that's not responding to their needs?

Mr. France HoangSPEAKER_11

Thank you for the question. There's a lot of AI available. Some of it is free, a lot of it you can buy month to month. I don't think the lock-in is a problem. What is a problem is context, right? There's going to be a fight for the context in which we provide our AIs and the context that emerges when we use AI. And I believe that users should have the ability to move that context from platform to platform. We do that inside my platform in the sense of you can share context between different models. So if today Claude is the better model, you use that. If tomorrow Gemini is the better model, you use that. And so I think being model-agnostic in what you create is the right path forward for industry providing these types of tools.

Mr. Jordan CrenshawSPEAKER_19

And I think it's important too, as companies are looking at which AI to deploy, they shouldn't have AI be the solution for its own sake. They should actually go in with an identified set of challenges they're trying to solve for and then look for the AI solution that's best talented or best positioned and targeted for solving those issues. So, you know, I think that's one of the reasons why it's so important that we do have facilitated AI training and education so small businesses can get smarter about what tools might be better for them.

Rep. Clay Fuller (R-GA)SPEAKER_07

And I wanted to ask you about that, Mr. Crenshaw. So when you're talking about a public-private partnership, because if I'm thinking about a small business in one of my Main Streets, they don't have the time to think strategically and have big thoughts on, what are those questions to help me, A, with literacy and then the inputs that I need for the AI to improve my business? Because they're worried about, hey, I can't even get someone to show up for a shift, and that's going to ruin my Mother's Day, which happened to my wife, where someone didn't show up to a shift. I don't have the certificate to go in and do her shift at her business. She's got to fill it on Mother's Day. So for those business owners that don't have the time to think big thoughts about what AI is appropriate for them, what does that public-private partnership look like so you can get that AI literacy for a small business to say, This is what I need?

Mr. Jordan CrenshawSPEAKER_19

Well, I think that's one of the great things about the way that the AI for Main Street Act and the AI WISE Act are put together. They complement each other. The AI WISE Act provides a lot of online tools and online availability of information. The AI for Main Street Act would work with SBDCs basically to have more of those localized trainings and localized education efforts as well. It's also one of the reasons why we think it's important that the business community itself takes a role in providing training. We at the Chamber have worked with local and state chambers of commerce to do trainings for local small businesses as well on AI through the Small Business Basics program. But also, too, I think it's important for individual businesses to be forward-thinking. One example is Hrag Kalebjian, who is the coffee shop owner I mentioned in my opening testimony, who's using AI for cutting his marketing down by about 70%. But what he does is he actually has an innovation hour with his baristas and his staff at the coffee shop to just go through how can AI help them and kind of going through new AI solutions to get them tooled and ready, even if they don't stay at his coffee shop, to go on somewhere else. So it really is different aspects of the ecosystem when it comes to AI that have a role to play.

Rep. Clay Fuller (R-GA)SPEAKER_07

Thank you. Uh, Mr. Chairman, I yield back.

Chairman Roger Williams (R-TX)SPEAKER_17

Gentleman yields back. I now recognize Ms. Goodlander from the great state of New Hampshire for 5 minutes.

Rep. Maggie Goodlander (D-NH)SPEAKER_01

Thank you, Mr. Chairman. Thank you to our witnesses for being here for this really important hearing. One of the through lines in this hearing has been a very powerful point that each of you have made, which is that getting access to AI is right now not the hard part for small businesses. The hard part is actually ensuring that a family-owned funeral home in Berlin or a homebuilder in Brookline or a day care in Keene can actually put this technology to use, and equally urgent, whether 5 years from now or 5 months from now—maybe it's probably more accurate—that small business will still have the leverage over the platforms that they built their businesses on. Mr. Hoang, thank you for your testimony. Thank you for your service. Your testimony has laid out for us a really clear vision of what doing it right looks like, what closing the readiness gap looks like. And I want to ask you, our resources are limited. We're fighting tooth and nail for every dollar, and many dollars that this administration is withholding from my state of New Hampshire that could actually go to solve and close this readiness gap. With limited resources, how could we scale up a model like the one you describe in your testimony, the Detroit Neighborhood Entrepreneurs Project? How could we scale this up? What would be your first concrete steps that we could take to scale up this model?

Mr. France HoangSPEAKER_11

So, I believe in public-private partnerships. A lot of the work we do at BoodleBox is with colleges and universities. They are the front door to democracy. Today's college students are tomorrow's workers. Obviously, state and federal funding and governments are intertwined closely with higher education. I would like to see greater support for AI literacy at the place where it counts, I think, the most, right during the formative years of someone's development, just before they enter the workforce.

Rep. Maggie Goodlander (D-NH)SPEAKER_01

Thank you. I appreciate that. I did want to ask about this. You make the powerful point that we got to fund the roads, not just the cars. To me, part of the road is connectivity itself. I represent one of the most rural districts in the country, and access to high-speed broadband is, for many of my small businesses, a core barrier to the adoption of AI tools. Can you speak to this in the rural small businesses you've worked with? And can you just— you agree that connectivity is part of what it is going to require for us to build the roads?

Mr. France HoangSPEAKER_11

Yeah, absolutely, Representative. In my written testimony, I talk about a rural family in Oklahoma. They live well past the last stoplight. Because they have good connectivity, they're able to access AI. They're able to have a marketing team, a development team, a business development team that is AI-powered that they would not otherwise have access to. But obviously, if they can't access the AI, they can't have access to those potential. And so connectivity is really a fundamental foundation for this access to the AI economy.

Rep. Maggie Goodlander (D-NH)SPEAKER_01

It is. And I just want to say the Broadband Equity, Access, and Deployment Act, the BEAD Program, has been so mission critical there. We've got $21 million that's currently being withheld from the State of New Hampshire that could go to exactly this problem. Mr. Aguh, I want to ask you—and thank you for your testimony and for the powerful points that you've made about the role of competition and the real perils that small businesses are up against. Before I came here to Congress, I was an antitrust enforcer, so I think a lot about what the scales could have looked like and could quickly look like for small businesses. Can you talk to us about examples that you've seen in your work of AI applications that have actually made small businesses better able to compete with large, dominant companies?

Mr. Chike AguhSPEAKER_04

Sure. First of all, thank you so much for the question. And I think, let me step back for a second to say, I think I've seen two things that have helped this. One, you hear a lot about transparency. For a small business owner to be able to know, is this tool doing what I need for it to do? That is hard right now because the technology moves so quickly. So being able on the front end to know what you mean to have solved, and then actually be able to track that on a regular basis is so important, because that's the first step to know when I need to switch. I think, secondly, to get the answer to your question, where we have seen the biggest advantages is in a couple areas. First, qualified lead generation, meaning if I'm a business who sells by getting on the phone and trying to sell my wares, getting a qualified list of who those folks might be versus just picking up the phone book, super helpful using tools like LinkedIn. That's one. Secondly, back-office capacity, whether it be accounting, tax, compliance, things like that, being able to track all that and make sure that I'm proactive versus reactive. I think the last piece, marketing. So many small businesses don't have a website. So many small businesses are not advertising in any way, shape, or form because they can't hire a designer. AI can make those things happen.

Rep. Maggie Goodlander (D-NH)SPEAKER_01

Thank you. I yield back.

Chairman Roger Williams (R-TX)SPEAKER_17

Gentlelady yields back. I now recognize Mr. Meuser from the great state of Pennsylvania for 5 minutes.

Rep. Daniel Meuser (R-PA)SPEAKER_06

Thank you, Chairman. Thank you to our witnesses. Certainly a lot, a lot to talk about. And my apologies, we have other committee responsibilities, many of them today. Mr. Crenshaw, I'd like to start with you, please. In business, I used to look at technology in the early 2000s as it's either a weapon that is used against you or a weapon that you use to benefit your company. AI certainly fits into that category and then some. What are the challenges small businesses are facing as far as, of course, there's privacy, there's cyber ransom challenges, the onslaught, the competitive nature of AI, whether you're there or not, and the usefulness of it? So maybe just give us a quick 30 seconds on what are you, main feedback you're getting from your members?

Mr. Jordan CrenshawSPEAKER_19

Uncertainty in the regulatory environment is a major barrier. It's the reason why 57% of small businesses in Pennsylvania are worried about a patchwork of regulations that leads to uncertainty.

Rep. Daniel Meuser (R-PA)SPEAKER_06

Okay.

Mr. Jordan CrenshawSPEAKER_19

You know, I think examples of that are we have a good base in about 20 states for data privacy legislation, but we see other states that are operating on the margins and trying to take more extreme approaches to regulation. Um, we've seen those states, for example, uh, craft, uh, legislation with the intent of only having their state attorneys general regulate to provide some certainty. Uh, unfortunately, we've seen instances where the trial bar, for example, has gotten creative and used laws never designed for consumer privacy, uh, to have gotcha lawsuits, uh, for basic things like collecting cookies. So if, if you're, uh, an auto dealer who has a, a chatbot just trying to get in touch with, with, you know, a potential customer. We've seen auto firms that have been sued with smaller ones for— with demand letters from people who were never even customers using these invasion of privacy statutes that had nothing to do with consumer privacy. We've seen hospital systems even sued under this as well in Pennsylvania. And it's why we need reform of this type of litigation abuse that we're seeing across the country. And then it really goes to the heart of why we do need a national AI framework as well. State-to-state patchwork there, it will be highly problematic because only the larger companies are going to know how to actually comply and compete, and it's going to leave small businesses in the dust.

Rep. Daniel Meuser (R-PA)SPEAKER_06

So basically, one of the most useful tools we've had in a long while to create productivity and efficiencies and effectiveness, one of your biggest challenges is government involvement and intervention on this, primarily at a state level?

Mr. Jordan CrenshawSPEAKER_19

I think at this point, if you look—let's look at data privacy, for example. There was a great survey that came out from ITIF that showed that if we have a 50-state patchwork of data privacy laws, it will cost the American economy $1 trillion over 10 years. $200 billion of that is going to be incurred by small businesses. Another example, I think if you look at the California Consumer Privacy Act, there was a rulemaking that came from that that was finalized just last year regarding automated decision systems, regarding cyber audits, regarding privacy risk assessments. The agency took a one-line part of the California Privacy Act and turned it into a half-billion-dollar AI rulemaking. When you combine that with the full rulemaking with things like privacy, the agency estimated it was going to cost small businesses $16,000 annually to comply.

Rep. Daniel Meuser (R-PA)SPEAKER_06

Wow so, we're all taking serious note of what you're saying here. All right, thank you. You mentioned about Basel III basically that access to capital is will be a very, very important right now, particularly with what we passed in the Working Family Tax Cut portion of the BBB, where we have better bonus depreciation and better better tax incentives for investment. So clearly that's something that's important. I'm going to I'm going to move on to Mr. Qaiyum. In your business—and congratulations, Merz Apothecary—how's AI helping you? And it was interesting the way you said how it now allows you to compete more so against the so-called bigger guys. Maybe you can talk about that a little bit.

Mr. Anthony QaiyumSPEAKER_05

Sure. Thank you, Congressman. You know, I always— there's a mantra that when you study small business or you look at the business leaders out there, they always say to work on your business, not in your business. And for most small business owners, that's just like it's a dream, but it's never reality. And I feel like in the past year since we've been using AI more heavily in our business, It's the first time where I feel like our leadership team has been able to work on the business. And when you're a small business owner, so much of your thoughts— what I— what the reason I lose sleep is, how do we make sure something doesn't happen? Because it's small and you feel like, you know, a pandemic can come along, uh, anything can come along and take that away.

Rep. Daniel Meuser (R-PA)SPEAKER_06

So the AI invest you're making cost prohibitive, or, or you, you can—

Mr. Anthony QaiyumSPEAKER_05

not at the moment. The privacy laws are the biggest concern about using it right now.

Rep. Daniel Meuser (R-PA)SPEAKER_06

All right, great. Thank you, gentlemen, very, very much. Chairman, I yield back.

Chairman Roger Williams (R-TX)SPEAKER_17

Gentleman yields back. I now recognize Dr. Morrison from the great state of Minnesota for 5 minutes.

Rep. Kelly Morrison (D-MN)SPEAKER_13

Thank you very much, Chairman Williams and Ranking Member Velazquez, for holding this hearing, and thanks so much to the witnesses for being here today. Over the past years, we've been talking about this all morning, we've seen rapid developments in the field of AI. AI tools of all kinds are readily available, and some have the potential to support entrepreneurs. But I do worry that as tech giants race ahead to push out their next AI model, there's insufficient attention on the actual utility of this technology to our small business owners and, frankly, to the American people. Too often, AI development narrowly focuses on finding out what AI is capable of rather than answering the question, how can this technology be used to improve people's lives? Now we find ourselves in a situation where many people are asking, Who even wanted this? And will this technology help me or will it actually hurt me, or maybe even kill me? Mr. Aguh, in your testimony, you highlight that technology moves at the speed of innovation, but adoption moves at the speed of trust, and that trust has not yet been earned. I think this is a really important part of this whole conversation. You go on to highlight that this lack of trust is reflected by the majority of Americans feeling that AI's risks outweigh its benefits and the slow adoption of generative AI by American small businesses. Rep. Tran touched on AI literacy. Mr. Aguh, can you share steps that tech companies could take to build America's trust in AI?

Mr. Chike AguhSPEAKER_04

First of all, thank you so much for the question. I think this is a really important point. I think I go back to a point that's been made, I think, repeatedly, which is one thing that creates trust is beyond any company, but it is having a national set of frameworks around what are our rules of the road around AI, from security to privacy, to bias, to civil rights, having a single set of rules that we all know, understand, agree upon, and can trust in. I think, secondly, having more of collaborations between the public and the private sector, like these companies, to solve really large issues. Again, around things like Some examples here are things like the Claude Corps, basically Claude, Anthropic working with nonprofits to teach them how to use these tools for the betterment of the work that they do in their communities. Small example, but a good one, and we'd love to see more there in that vein. I think, lastly, helping small businesses pick the tools that are right for them, even if those tools are not their tools, I think that is really important, so that consumers and small business leaders have those choices is so important. I think right now you have to make sure— it is tempting to believe that everything is a nail and that is amenable to the AI hammer or a particular AI hammer, and helping these small business leaders pick the exact hammer for the exact right nail is so important. It might be Claude, it might be ChatGPT, it might be a Midjourney, it might be a Notion, but how do we basically figure out what those tools are? And putting that agency in the hands of small business leaders, I think, is really key. Last point: small business leaders also reflect the feelings of their workers. So the more that workers become more comfortable, again, are involved in these decisions, figuring out how it can benefit the business, the better off their employers are going to be and more trusting their employers will be with these companies.

Rep. Kelly Morrison (D-MN)SPEAKER_13

Thank you so much. And I am sympathetic to this idea that we have a— if we have a patchwork of state regulations across the country, that creates all kinds of complications. Could any of you give 2 specific examples of what a federal framework would look like for regulating AI?

Mr. Jordan CrenshawSPEAKER_19

One of the notes, I think important to note, 68% of small businesses in Minnesota are worried about a patchwork. And one of the solutions can come out of Minnesota is copying Minnesota's data privacy law and making it the national standard. And so that's a—

Rep. Kelly Morrison (D-MN)SPEAKER_13

Love that answer. Sorry to interrupt.

Mr. Chike AguhSPEAKER_04

I'd say one piece that is not talked about enough is intellectual property, meaning when a lot of intellectual property was created back when it was, this use was never thought of, never considered. So whether I'm Universal Music Group, who regulates—you know, 30 has 30% of the world's music, or candidly, I am a bluegrass artist from Kentucky, I may never have thought of what happens if my music is used by this. And we need a framework to govern how I say it can be licensed, how I'm compensated, how I want to be compensated, and by whom. Right now, we just don't have a framework for this, because back then, we didn't think that this would be possible. So that's one example of an issue that's undertalked about that is really, really key and a big trust issue.

Rep. Kelly Morrison (D-MN)SPEAKER_13

Thank you. One I'm running out of time, but one quick last question. Before I ran for Congress, I worked as an OB-GYN for many years. So as you might imagine, patient confidentiality is critically important. And one of the pieces of AI regulation that I think is crucial is that data privacy question, and I think it's something that people are worried about, too. And I know small business owners also have concerns about it. How can we protect patient privacy? Mr. Aguh, do you have any thoughts on it?

Mr. Chike AguhSPEAKER_04

I know I'm over time, so I'm looking at the chairman to— Sure. I think candidly, we already have a lot of health privacy laws. And I think the question is, how do they intersect with this new technology? And so I think that's the question. How do we take existing regulations and expand it to this new technology. And I'll stop there out of respect to the chairman.

Rep. Kelly Morrison (D-MN)SPEAKER_13

Thank you. And thank you, Mr. Chair. I yield back.

Chairman Roger Williams (R-TX)SPEAKER_17

Gentleman yields back. I now recognize Mr. Bresnahan from the great state of Pennsylvania for 5 minutes.

Rep. Robert Bresnahan (R-PA)SPEAKER_08

Thank you, Mr. Chairman, Ranking Member, and to all the witnesses for being here today. Over the past few years, artificial intelligence has become a part of nearly every corner of our economy, and small businesses have increasingly embraced these tools to help them compete and to grow. Whether it's summarizing research, analyzing data, streamlining customer service, or organizing documents, AI has allowed small business owners to compete in minutes, which used to take hours or even days. But there's no question these technologies can make businesses more efficient, but we continue to adopt AI, we also have to make sure that those gains don't come at the expense of American jobs. We need to make sure employees have the training and skills to use these tools efficiently, and AI enhances their work rather than replacing it. So I'm going to— my first question for Mr. Qaiyum. Congratulations to you and your family and everyone at Merz Apothecary on celebrating 150 years of service to your community. My question would be, at what point did you decide to take the initiative to start looking at different AI implementation? And something that I hear from a lot of small businesses and coming from a small business background was sometimes the local plumber, heating contractor doesn't even know where to begin. So at what point for you in your business did you decide that, Hey, in order for us to scale, in order for us to grow, we need to be thinking outside the box and finding ways to implement some sort of AI technology?

Mr. Anthony QaiyumSPEAKER_05

Thank you for the question, Congressman, and for your congratulations. You know, I came to the retail and small business, this industry, through the dot-com rise in the '90s. So I've always been into technology. And so I may be a bit rare in that sense that I view it as my— part of my role in the business has always been to stay ahead of the technology curve. So I've been following it for a few years now, at least. And I've been the person testing it out on the weekends and at nights to see what it could do, and then bringing it to the team and saying, look at this. So I feel like for me, I happen to be personally interested in it, but I know that that's not most of my small business friends, the other business owners on the block. So I think, you know, we do need support in that sense.

Rep. Robert Bresnahan (R-PA)SPEAKER_08

So you've been around for 150 years. What generation are you in the business?

Mr. Anthony QaiyumSPEAKER_05

I'm the 5th owner in the 2nd family to own the business.

Rep. Robert Bresnahan (R-PA)SPEAKER_08

Wow.

Mr. Anthony QaiyumSPEAKER_05

So,

Rep. Robert Bresnahan (R-PA)SPEAKER_08

so what was the first piece of technology that you implemented that was in the ecosystem of AI? Was it just utilizing language models to respond to inquiries or to summarize research? What was like that, that initial barrier that you overcame?

Mr. Anthony QaiyumSPEAKER_05

Yeah, we used some early language models around coming up with variations, like we would write marketing copy and then come up with 10, 15, 20 variations on that, and that was many years ago. But I would say ChatGPT in the past few years was the first model that I started using kind of as an experiment on my own.

Rep. Robert Bresnahan (R-PA)SPEAKER_08

My last question would be, and then before I divert over, have you actually needed to bring anyone on that had experience in managing AI models, or has that been something that you've been able to sustain with— inside of your operations?

Mr. Anthony QaiyumSPEAKER_05

So far, we have sustained it inside of our operations. And the models are getting to the point where when we don't know something, they can kind of often guide us on how to do it. So I call us sort of like pseudo-techies in a way. But I think we're at the point now where we would like to bring someone in who has more experience because we see so much opportunity ahead.

Rep. Robert Bresnahan (R-PA)SPEAKER_08

I think that's what we need to be curtailing some of our educational opportunities and teaching the next generation of workforce how to work with inside of these parameters, but also being very conscientious of we're not looking to replace jobs, we're looking to add jobs specifically to the skill set relating around artificial intelligence. And I think when you say AI, it's a very broad spectrum of innovation that could be implemented. So I'm going to pivot over. Mr. Hoang, what are the biggest challenges you see small businesses facing when they begin implementing AI? And what kind of advice could I take back to some of my small businesses that are right on the cusp of considering to take the leap, just to kind of give them some assurances and relieve the agita about taking that initial that initial plunge?

Mr. France HoangSPEAKER_11

Yeah, thank you for the question. I'll try to be brief. The main 2 challenges are first, just where to get started. What are the use cases? AI can do so much. So what's the first thing? And I always advise businesses to start with the problem that is most at hand. What is the thing that bothers them day to day? That's where to get started. The second is AI is only as good as the information you put into it, the context. A lot of businesses are fearful of putting their proprietary data in. That's unfortunate because that's how you get the best results from AI. And so the advice I would suggest you take back is get started and find a platform where you feel the privacy and security allow you to use your data.

Rep. Robert Bresnahan (R-PA)SPEAKER_08

Thank you. Garbage in, garbage out. I yield.

Chairman Roger Williams (R-TX)SPEAKER_17

Gentleman yields back. I now recognize Ms. Scholten from the great state of Michigan for 5 minutes.

Rep. Hillary Scholten (D-MI)SPEAKER_14

Thank you, Mr. Chair and Madam Ranking Member. Thank you to our witnesses today. Our small businesses juggle a wide range of responsibilities and tasks every day to keep their operations running. While AI offers tools to help streamline many of these needs, we know that many entrepreneurs simply don't have the time or resources to utilize this technology to its fullest. That's why I was so proud to introduce my bill, the AI WISE Act, which directs the Small Business Administration to create learning modules for small businesses to help them navigate this emerging technology. I'm pleased that my bill passed the House earlier this year. We're, of course, hoping to have it signed into law. Mr. Aguh, how would an SBA resource to help entrepreneurs think about AI usage more effectively benefit small businesses?

Mr. Chike AguhSPEAKER_04

It would benefit it hugely. One, because again, we talk about kind of the promise and the peril. You've heard, I think, from a number of the witnesses, you need certain tools and means to actually capture that promise, and the first thing is knowledge. So knowing again where I can apply this most in my business. Should I apply it toward my inventory issue? Should I apply it toward my back office? Should I apply it toward my marketing first? Getting guidance on where to start with that, I think, is really helpful, one. I think, two, lots of businesses are unclear, OK, how do I introduce this with my workers? That is a hard part of this, particularly when you are in a small business, because there is fear, there is lack of knowledge, there is uncertainty. What does that change management look like? And then I think the third piece is, how do I monitor these tools over time? The ubiquity of these tools, the amount of these tools, is only useful to the extent that I know enough to switch when I need to. Therefore, what am I doing to monitor these tools over time to make sure, hey, you know what, actually it is ChatGPT here versus Claude, or I need to use a Perplexity here versus another tool, or there is a gap right now in terms of in the market for what I need. I think those are three specific areas: where to apply, how to do the change management, how to monitor over time, where a resource like this could be really, really valuable.

Rep. Hillary Scholten (D-MI)SPEAKER_14

Yep. Yep. West Michigan is home to our Regional Small Business Development Center, SBDC, which served over 500 clients last year and spurred $10.4 million in capital formation. These centers are foundational to the success of our local economies, and on a national level, America's SBDCs partnered with Google, AIU, to facilitate training SBDC staff across the country to assist clients with using AI in their operations. Not sure if you're familiar with that. Michigan now has the second-highest number of staff trained in AI literacy in the country. We're super proud. Mr. Aguh, again, how important is it that SBDCs receive full federal funding and support these kinds of activities? And I'll actually open it up to the whole panel. I saw some heads nodding. Feel free to weigh in on usage there.

Mr. Chike AguhSPEAKER_04

I cannot overstate how important the resource, not just of the funds, but also the people. Because in the end, what we find is most small business people, they want to talk to people about how to use these tools, and that does require resources.

Rep. Hillary Scholten (D-MI)SPEAKER_14

Additions, additional comments or thoughts on that?

Mr. Anthony QaiyumSPEAKER_05

I would echo that. I think our team, oftentimes, it's not enough to just keep hearing how good it is or watch this video. I think it is, it's having some structured format and people who demystify it and provide a doorway in. And my experience is that once you give someone that doorway, then they can actually go really far.

Rep. Hillary Scholten (D-MI)SPEAKER_14

Yep. In my remaining time, I want to talk about a different bill of mine, the SBA AI Adoption and Reporting Act. It's really important for small businesses to have the tools they need, right, to use AI effectively. But the federal government also has the opportunity to utilize AI for its own purposes and its own operation. The SBA is no exception, from evaluating contracting bids to improving research and programming. The government can take steps to ensure AI is working for Main Street in every single way from within the administration itself. That's why I introduced the SBA AI Adoption and Reporting Act, which would direct the SBA to implement AI-use disclosure policies and procedures as required by law and recommended by the Government Accountability Office. How could this help address small businesses' concerns about the government's use of AI? Those people who might say, I was weeded out because I didn't fit the algorithm, or they have concerns about that. Any reflections from your work? I'll open it up to the panel again.

Mr. Anthony QaiyumSPEAKER_05

Well, as the beneficiary—our business is the beneficiary of an SBA loan that almost didn't happen at one point because of some of the challenges with the banks and everything. I would say that my experience would be having transparency and help along the way to make that an easier process would have been a huge help for our business. And thankfully, it did work out. But I'd like to see more businesses get that opportunity that we had.

Rep. Hillary Scholten (D-MI)SPEAKER_14

Heard, heard. Thank you. Thank you. Well, thank you again, gentlemen, for coming, for your time, and most importantly, for your incredible work in small businesses across the country. Thank you. Yield back.

Chairman Roger Williams (R-TX)SPEAKER_17

Gentlelady yields back. Right now recognize Mr. Jack from the great state of Georgia for 5 minutes.

Rep. Brian Jack (R-GA)SPEAKER_09

Thank you very much, Mr. Chairman. And I'd like to begin my line of questioning by recognizing someone in the audience with us. Alex Miller is in the audience with us from Houston, Texas, the great state of Texas. So I'm delighted that she had a chance to get to see how committee processes work. And I would like to start my first line of questioning with Mr. Qaiyum. And a question I have for you, and it's something that I hear a lot within my district, is there's a natural fear that AI could replace workers, especially within entry-level roles. And I'm just curious, in your own experience, has AI replaced people or has it helped you bring more people in? What's your perspective?

Mr. Anthony QaiyumSPEAKER_05

Thank you, Congressman. In our experience, AI has helped us bring more people in. It's created more opportunity. So I look, you know, AI right now is the— this new exciting potential big advantage for small business, but ultimately it will be software and it will become a commodity. And I think humans are the durable advantage that you have. So to us, we look at it as a way to, or as a method and a set of tools to help us increase our capacity and then bring more people on. And when we're serving our customers better and in a specialty business, knowledge, we speak, I think, 10 languages on our staff and have experts across various fields, including pharmacists, makeup artists, certified herbalists, you name it. So that is not going to be replaced. People like to talk to people. So we see it as a creator of opportunity.

Rep. Brian Jack (R-GA)SPEAKER_09

Thank you very much. Mr. Hoang, same question to you.

Mr. France HoangSPEAKER_11

Yes. If you're a small business of 1 to 5 employees, there's not many people to replace, right? AI actually enables you to grow your business faster and employ more people. I also like to note there's this interesting concept called the Jevons paradox. What it says is if you look at a broad enough time horizon and you look across enough industries, technology ends up creating more jobs over time than it replaces. Technology will replace jobs, but as we saw with past technological revolutions, right, new jobs emerge. I have an 11, 8, and a 6-year-old. I think I heard the statistic that 66% of the jobs that a 10-year-old's going to have don't even exist yet.

Rep. Brian Jack (R-GA)SPEAKER_09

Thank you very much. Mr. Crenshaw, I'd like to speak specifically about an initiative, specifically that President Trump's SBA, in collaboration with Perplexity AI, recently launched, as you may be aware, the Main Street AI Accelerator, which offers computing credits to small businesses that hold SBA-backed loans. Do you believe that a program like that is the right model when approaching the AI gap, and what would make assistance in this capacity most useful to owners who need it most?

Mr. Jordan CrenshawSPEAKER_19

We think it's incredibly important that there's AI training and AI accelerators. So I think this is an opportunity where small businesses can grow. I think, and I want to really kind of echo what the points of some of the other panelists is that, as we look at AI, AI is doing much like what we saw at the turn of the 20th century. With the turn of the 20th century, technology brought about an industrial revolution. Well, now we're seeing technology create an entrepreneurship revolution where small businesses and small companies can get off the ground and run and grow, and 82% of small businesses in Georgia grew their workforce, the ones who are using artificial intelligence. This is confirmed in many ways, too. We've seen some great studies as well by Ramp came out recently that showed that the more companies are investing in artificial intelligence, they're growing their headcount at faster rates. And then finally, I think it's really important to note, too, that the Federal Reserve has put out really great data over the last few years. And as you see, the number of small business applications over the last few decades was pretty stagnant up until about 2020. That number skyrocketed after 2020, and many thought that that was in large part due to COVID and people kind of starting out on their own, but those numbers have continued to go up post-introduction of ChatGPT and generative artificial intelligence. And that's been a sustained increase in new business starts. And so when you look at all of that, I think we're optimistic about the impact of AI, but it's important that we also have training and accelerators for small businesses to ensure they reap the full benefits.

Rep. Brian Jack (R-GA)SPEAKER_09

Wonderful. In our closing 40 seconds, you mentioned Georgia. Both my colleague Clay Fuller and I represent districts that in some places need broadband access. Could you speak to how imperative it is that we're able to ensure that all of our constituents across the country have access to broadband internet that enables them to potentially enjoy some of these resources?

Mr. Jordan CrenshawSPEAKER_19

Broadband is essential to operating in the 21st century economy. A small business cannot compete without access to connectivity and to data.

Rep. Brian Jack (R-GA)SPEAKER_09

Wonderful. Mr. Chairman, I appreciate you convening this hearing, and I yield back.

Chairman Roger Williams (R-TX)SPEAKER_17

Gentleman yields back. I now recognize Ranking Member Velazquez from the great state of New

Ranking Member Nydia Velazquez (D-NY)SPEAKER_12

Thank you, Mr. Chairman, and thank you to all the witnesses for being here. And I'm sorry I wasn't when you were making your statements because I was participating in another hearing on financial services. Mr. Aguh, I concur that transparency in AI and information on AI is crucial. And for members of this committee and other committees of jurisdiction regarding AI policy, accurate data is important in order for us to make effective AI policy. Estimates for small business AI adoption rates vary widely. The SBA's Office of Advocacy estimates the rate is 8.8%, but the US Chamber estimates that it is at 58%, a nearly 50-point gap. Why does this difference exist?

Mr. Chike AguhSPEAKER_04

Probably a long answer, but candidly, it depends on how you define adoption. Is adoption an employee who uses ChatGPT to answer a question once, twice a day, or is it kind of working truly side-by-side with a number of AI tools to do your work? That's a wide definition. What I would say is when I think about the 200 businesses that we support or even ask any CEO in the private sector currently, no one will say that AI adoption is where they want it to be. All of them would say that their workforces are not where they want to be to get the full value for their business and for their community. And so the question is, how do we increase that adoption? And I think that goes to the trust questions. That goes to the infrastructure questions. It goes to the literacy questions. But I think right now it depends on how you define adoption. But if you were to ask a CEO, What do they want from adoption? they want, I want my people using AI to do the things that people shouldn't be doing, and so that they can do the things that only people can do so that our business grows, we make more revenue, and we help our communities and grow jobs.

Ranking Member Nydia Velazquez (D-NY)SPEAKER_12

Thank you. And bias and discriminatory decision-making are major AI risks. How can this harm small firms and incur legal and reputational costs.

Mr. Chike AguhSPEAKER_04

I'll use a very specific example. This actually comes from my time when I was serving federally. But we would hear from small businesses who are using AI-driven resume and hiring tools to comb resumes, to begin to kind of sift out people for that first round. And what they began to find, this particularly became an issue during the pandemic, was at times people who could do the job were unintentionally screened out Which of course for the business created a problem of there's an empty billet of someone who could have done a job, and now that job is not being done. That's one very specific example where not only do we— does that type of bias offend our values, but it also goes against kind of common sense in the interest of the business. So the key is how do we make sure that we mitigate bias not just for our values, but for the sake of the business who's actually trying to get the benefit? That it's the right thing to do, but it's also the smart thing to do.

Ranking Member Nydia Velazquez (D-NY)SPEAKER_12

So, can training data be adjusted to reduce bias?

Mr. Chike AguhSPEAKER_04

The answer is yes, but it's— the important thing is that that is not on the small business. It can't be. They're not making the tool. If I— this goes to, I think, frankly, the largest folks who are making these tools, and the key thing that I would say is it's in their interest to do such. If I am a small business and I'm creating a tool, I want it to reflect my community so I can serve my customers better. Tools that don't do that are not going to help me serve my customers. So if I'm a provider, an LLM provider, hyperscaler who's trying to create a tool, you want to help your customers help their customers. And having representative data that actually reflects reality and the outcomes that it produces is best for everyone.

Ranking Member Nydia Velazquez (D-NY)SPEAKER_12

Thank you. Mr. Hoang, you write in your testimony the principle behind the AI WISE Act that federal support should remain neutral among specific tools and vendors is exactly right. Why? What are the consequences if the SBA and other agencies favor certain vendors over others?

Mr. France HoangSPEAKER_11

Thank you, Ranking Member, for the question. We are in the very early days of AI. It's too soon to start picking winners. And not winners. In our own work with hundreds of organizations, we see that different tools are right for different purposes and that organizations that succeed don't just rely on one single AI tool. They use different tools, they combine them, they bring humans. I truly believe the future of work and teaching and learning are multiple AIs and multiple people working together in a collaborative environment.

Ranking Member Nydia Velazquez (D-NY)SPEAKER_12

Thank you. Thank you. Mr. Chairman, yield back.

Chairman Roger Williams (R-TX)SPEAKER_17

Gentlelady yields back, and I'd like to thank our witnesses for their testimony today and for appearing before us. It's been great dialogue. Without objection, members have 5 legislative days to submit additional materials and written questions for the witnesses to the chair, which will be forwarded to the witnesses. I ask the witnesses to please respond promptly. If there's no further business, without objection, the committee is now adjourned.