As Congress holds hearings with SEC Chairman Gary Gensler, it’s important to talk about decentralized AI. This sector sits at the crossroads of blockchain and artificial intelligence, yet it often gets overlooked.

Decentralized AI isn’t something you can just fit into existing financial regulations or standard AI rules. It has its own unique needs. Unfortunately, lawmakers might try to lump it in with other bills or ignore it altogether. That would be a missed chance for innovation.

So, what is decentralized AI? It allows data, computations, and decision-making to be spread across multiple devices or nodes. This means they can work together without a central authority. Developers can use open-source software and share data to create AI models. This setup gives them the tools they need to participate in the AI ecosystem without managing everything themselves. It’s especially helpful for researchers and startups facing rising costs and access issues.

That’s why it’s crucial for lawmakers to recognize decentralized AI as they regulate the broader AI landscape. The industry is rapidly growing and dominated by major corporations. Companies like Microsoft, Meta, and Alphabet are acquiring startups and launching new products at lightning speed. While this investment is good, lawmakers must ensure that space is made for researchers and smaller developers to thrive. This includes being watchful about antitrust issues and ensuring that government funding doesn’t only benefit the big players.

Currently, Congress is making strides to clarify cryptocurrency regulations. However, many of the proposed bills are one-dimensional, focusing mainly on financial aspects. They fail to distinguish between digital assets and the decentralized AI applications that run on the same protocols. It wouldn’t make sense for financial regulators to oversee decentralized AI just because some projects issue tokens. It’s like having the SEC regulate toothpaste just because a company issues stock.

We need to get this right. Decentralized AI is vital for revitalizing the organizations that sparked the AI revolution and could lead to the next wave of innovation. Universities that pioneered machine learning and neural networks are struggling to compete with Big Tech as they snap up talent and resources. Startups are facing similar pressures, often having to delay projects. If these engines of innovation can’t operate effectively, progress will be in the hands of a few large corporations. That’s a lesson lawmakers should heed, as these institutions create jobs and opportunities.

Decentralized AI can help counter market concentration. It allows organizations with limited funds to share data and computing power across nodes. Developers can connect multiple databases and use distributed GPUs for their models. This approach is more affordable and encourages smaller players to participate. It also addresses data privacy concerns, as developers can process data locally. This minimizes the need to send sensitive information to centralized servers, reducing the risk of breaches.

Establishing rules that allow decentralized AI to thrive is essential. Congress needs to set clear regulations for data privacy and security, ensuring that individuals’ information is protected when processed locally. Transparency and accountability in AI algorithms are also critical to uphold ethical standards and prevent bias.

Lawmakers should consider a unique regulatory framework for decentralized AI. This framework should be separate from traditional AI regulations and financial guidelines. New legislation must address the specific challenges of decentralized AI, ensuring transparency in algorithmic decisions and accountability in decentralized networks. Additionally, Congress should expand funding opportunities under the National AI Initiative Act. This would ensure that decentralized AI projects, especially those from universities and small businesses, receive government support and tax incentives. This way, we can prevent Big Tech from monopolizing AI innovation. Strengthening antitrust enforcement is also crucial to stop major corporations from controlling vital AI infrastructure.

But it’s not just up to Congress. With lawmakers focusing on crypto and AI, now is the perfect time for advocates of decentralized AI to speak up. The industry hasn’t always done the best job of communicating its needs. Yes, the technology can be complex, but advocates can explain it in a way that’s easy to understand. It’s important to stress how vital this regulation is for preserving innovation, jobs, and opportunities. That’s the kind of message that resonates with Congress and can elevate this field to new heights.