News Summary
New York’s burgeoning AI sector is at risk as Governor Hochul considers the RAISE Act, which could impose strict compliance burdens on local developers. This legislation may hinder innovation, particularly for small businesses and startups, raising concerns among industry leaders. Despite significant growth and investment in the state’s AI market, the RAISE Act could ultimately disadvantage New York’s tech community compared to out-of-state competitors, affecting collaborations within the open-source community essential for AI’s advancement.
New York is facing a pivotal moment for its artificial intelligence (AI) ecosystem as the RAISE Act awaits the approval of Governor Kathy Hochul. This legislation could impose significant compliance burdens on local developers and limit their access to essential AI models, raising concerns among industry founders regarding the implications for the state’s burgeoning tech sector.
If the RAISE Act is signed into law, it threatens to create challenges for New York’s AI companies, particularly smaller businesses and startups. The legislation imposes high compliance costs that could impede innovation and competitiveness, potentially causing businesses to reconsider their operational bases. Nils Tracy, founder and CEO of Authorship, has made it clear that he would likely not choose New York for his company were the RAISE Act to take effect.
New York’s AI sector has seen remarkable growth over the past decade, with the space leased by AI companies increasing more than tenfold. The workforce dedicated to technology in New York has also expanded significantly, growing by over 40% from 2019 to 2023. During this period, venture capital investment in local startups has increased, and there has been no substantial pressure from investors encouraging companies to shift operations to Silicon Valley, a historic tech hub. This illustrates a vibrant market for AI innovation within the state.
New York holds distinct advantages in nurturing AI solutions, especially with its array of leading financial institutions, law firms, and healthcare systems that require specialized AI technologies to meet their regulatory compliance. This unique ecosystem fosters partnerships between large corporations and startups, which is vital for the development of open-source AI models and solutions that play crucial roles in sectors such as medical research and education.
The potential repercussions of the RAISE Act could give out-of-state competitors an edge, especially if startups in New York face more stringent compliance requirements than their counterparts in areas like California. Failure to veto this legislation could not only inhibit innovation but could also disrupt essential collaborations within the open-source community, which rely on free-flowing interaction between businesses of all sizes.
Recent developments emphasize the urgency of the situation. Ascertain, a New York-based AI company dedicated to automating healthcare workflows, secured $10 million in Series A funding led by Deerfield Management, which is focused on improving healthcare delivery. The Deerfield Healthcare Innovations Fund III, recently announced, is expected to invest over $600 million in the development of promising healthcare technologies, highlighting the potential for significant funding in this sector despite the looming regulatory challenges. Deerfield’s headquarters, Cure, acts as a healthcare innovation campus aimed at accelerating new solutions in health.
Ascertain is addressing the high administrative load faced by healthcare workers, with reports indicating that case managers spend up to 60% of their time on non-clinical tasks. This demonstrates an urgent need for efficiency in healthcare systems, a gap that Ascertain aims to fill through automation technology.
The challenge posed by the RAISE Act has brought attention to the ongoing collaboration essential for the success of AI in New York. The partnership of companies like Ascertain with major healthcare organizations, including Northwell Health, allows for better distribution and improved data access, enhancing their AI capabilities to deliver tangible results within the healthcare sector.
As the clock ticks for Governor Hochul to make a decision on the RAISE Act, entrepreneurs and innovators in New York are hopeful for a veto, emphasizing that the state’s AI ecosystem deserves support rather than constraints to thrive and expand.
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Additional Resources
- Crain’s New York: Hochul Should Veto the RAISE Act
- Wikipedia: Artificial Intelligence
- The SaaS News: Ascertain Raises $10 Million in Series A
- Google Search: AI Startups New York
- PR Newswire: Deerfield Management Closes Over $600 Million Healthcare Venture Fund
- Encyclopedia Britannica: Machine Learning
- HealthExec: Private Equity Firm Deerfield Earmarks $600M for Healthcare Investments
- Google Scholar: AI in Healthcare
- Healthcare IT Today: Ascertain Raises $10 Million to Scale AI Platform
- Google News: Healthcare Automation
Author: STAFF HERE NEW YORK WRITER
The NEW YORK STAFF WRITER represents the experienced team at HERENewYork.com, your go-to source for actionable local news and information in New York, the five boroughs, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as New York Fashion Week, Macy's Thanksgiving Day Parade, and Tribeca Film Festival. Our coverage extends to key organizations like the Greater New York Chamber of Commerce and United Way of New York, plus leading businesses in finance and media that power the local economy such as JPMorgan Chase, Goldman Sachs, and Bloomberg. As part of the broader HERE network, including HEREBuffalo.com, we provide comprehensive, credible insights into New York's dynamic landscape.
