AI Lobbying Is Heating Up, & The Most Popular AI Tools For Startups
Here's what happening in AI x Banking this week.
Hi everyone! The Dog Days of Summer are in full effect—lots of folks are on vacation and taking a break before it ends. Our customers are still building though—congrats to Sling Money for their $15M Series A round, led by Union Square Ventures, Ribbit Capital, & Slow Ventures!
Sling helps move money around the world—cheaply and instantly with stablecoins—they're operational across 50+ countries and are one of our international customers. Sling knew that there were a lot of complications around keeping high compliance standards around the world, and that’s where Greenlite came in. (If you want to read more, check out our Sling Money case study below!)
Now, let’s dive into this week’s news!
Fintechs Lobbying Starts To Focus On AI
A new report from OpenSecrets shows that fintechs are spending more on lobbying than ever before.
PayPal and Block are the biggest spenders, getting close to $1 million in lobbying spend in the first half of the year (PayPal at $800k and Block near $1m). Early Warning Systems, the company that operates Zelle, also hit an all time high in half-year spending, putting in $180k into lobbying.
Unfortunately, there’s not a whole lot of disclosures around what these companies are lobbying on. Block spent most of their lobbying on the Tax Relief Act, but also includes crypto (Block’s Cash App allows users to buy and sell bitcoin) and AI.
It’s still early for lobbying dollars to really pour into focusing on AI, but the fact that there’s any spend at all shows that its something that’s on the mind of these companies. There’s a lot of ambiguity around AI and financial services with regulators, who are worried about enabling unintended biases or customer data leaking out into models.
Expect to see more lobbying around fintechs and AI over the next few years, as DC and Silicon Valley work to figure out how to enable new tech fairly and equitably.
A New AI Sandbox Bill Can Help Financial Services Deploy AI Faster
A new bill in Congress, in both the House of Representatives & Senate, is advocating for a new sandbox for financial services companies to experiment with AI products without worrying about regulatory repercussions. (Check out the full text of the bill here.)
The idea of a financial services sandbox in the US has been widely discussed around a lot of different technologies—fintech in general, crypto, etc. But this new proposal is the first one to be focused on AI.
Some key points:
Firms can apply to experiment with AI projects without facing overly restrictive regulations or fear of retroactive enforcement.
Companies can request waivers or modifications to specific regulations and propose alternative compliance methods.
Projects must not pose a systemic risk to the U.S. financial system and must comply with anti-money laundering laws.
It’ll include a lot of different regulators: the Federal Reserve, FDIC, OCC, SEC, CFPB, NCUA, and FHFA.
This could also accelerate regulations around AI in financial services. With regualtor’s getting full view of experiments and test cases, they could be more open to making AI-driven financial products widely available.
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What AI Tools Are Startups Spending Money On?
Thanks to Ramp, the spending platform company, we have some insights into what AI tools companies are putting their dollars into.
Ramp’s Quarterly Spending report (here) had an entire section dedicated to AI spend. Here are some of the highlights:
Big Spike In Accounts Payable: A huge spike in Accounts Payable implies a lot of longer-term contracts for AI spend (Ramp notes that companies usually put long term contracts on AP.) Foundational models like OpenAI are becoming more important for businesses, but so are software like Cursor (code generation, number 5 on the list of fastest growing software vendors by customer count).
Anthropic Is Seeing A Surge: The OpenAI competitor saw a huge boost—53% growth in the number of customers transacting on Ramp cards quarter-over-quarter. After big releases like Claude 3.5 Sonnet and new features for Claude (its ChatGPT competitor), it seems like the foundational model race is heating up.
Existing Platforms Adding AI Are Seeing Gains Too: It’s not just AI startups that are seeing big gains—so are existing platforms that are integrating AI. Cvent, an events platform that added a slew of AI features, almost doubled the amount of customers on Ramp, and had a high card spend ($2,132). Squarespace was in second place with 62% more customers than the previous quarter. Meanwhile, tools like Canva are seeing big spends from customers that are using the platform for the first time.
