[co-author: Amaria Trozzo]

TAKEAWAYS

• Artificial intelligence wins big in President Biden’s FY 2024 budget request with billions in new funding proposed for AI-related research, hardware, software and services at the departments of Defense, Energy, Homeland Security, Health and Human Services, Transportation, and other agencies throughout the federal government.
• Federal regulators also win big in the President’s FY 2024 budget with $5 million in new funds proposed for the Federal Trade Commission to conduct oversight and enforcement of AI.
• While congressional appropriators will make ultimate decisions on whether to fulfill the President’s request, the budget provides helpful insights on where AI investment and regulation is heading in Washington, DC.

The artificial intelligence (AI) revolution is rapidly transforming industries and reshaping our world as we know it. With advances in machine learning, natural language processing and computer vision, AI has moved beyond the realm of science fiction and become a driving force of innovation and productivity. This disruptive technology is creating new opportunities, challenges and implications for society at large. The Biden Administration is taking notice—here is a look at new AI programs and funding proposed in President Biden’s fiscal year 2024 budget proposal released on March 9, 2023.

Department of Defense (DOD)
The DOD is the big winner in the President’s FY 2024 request. The DOD’s budget request seeks more than $1.8 billion for the DOD to “adopt and deliver AI capabilities,” a $600 million increase from the $1.2 billion that was appropriated for AI in FY 2023. The DOD plans to use the AI funding for a variety of purposes, including developing new AI-enabled capabilities for the warfighter, training and educating DOD personnel on AI, conducting research on the ethical and legal implications of AI, and building partnerships with academia and industry to advance AI research and development. DOD funding will support research conducted at universities, national laboratories and private companies.

Understanding the implications AI has for cybersecurity is an important part of the DOD’s mission. As outlined in the White House’s National Cybersecurity Strategy released on March 2, 2023, the DOD has been directed to explore and implement new applications of artificial intelligence as part of its larger charge to build resilience in the cyber and space domains and across the entire defense ecosystem. The FY 2024 DOD budget includes increased investments in cybersecurity that are related to AI, including $67.4 billion for cyber, IT and electronic warfare capabilities, $145 billion for research and development activities and $33.3 billion for space capabilities.

Department of Energy (DOE)
The FY 2024 budget request for the DOE includes increases across the board to the DOE’s applied energy programs. The DOE’s Office of Science is specifically tasked with conducting cutting-edge research into artificial intelligence and quantum computing. The Office is requesting a historic $8.8 billion overall, with $730 million allocated for research into AI and other projects at the national laboratories.

Department of Homeland Security (DHS)
The DHS is another big budget winner. The President’s FY 2024 budget request includes funding to develop and deploy AI-enabled capabilities across a range of DHS missions, including new tools for detecting and preventing illegal immigration, terrorism and cybercrime. The DHS has proposed funding to procure new AI systems, including $24.5 million for a new Intelligence Data Environment for Analytics. The DHS also is investing in facial recognition technology and drones, and systems that analyze large amounts of data to identify potential terrorist threats.

Health and Human Services (HHS)
HHS invests heavily in AI with more than $1 billion in AI-related funding proposed in President Biden’s FY 2024 budget request. Funding will be used to develop and deploy AI-enabled capabilities across a range of HHS missions, including new AI tools for diagnosing and treating diseases, monitoring and responding to public health threats, and testing and approving medical products through AI-powered systems for identifying potential drug interactions.

Department of Transportation (DOT)
The FY 2024 budget includes more than $1 billion in funding for AI programs at the DOT. Funding would be used to develop and deploy AI-enabled capabilities across a range of DOT missions, including new tools for detecting and preventing accidents, such as computer vision systems for detecting distracted driving. The DOT is also investing in new tools for managing traffic flow, such as predictive analytics systems for identifying and responding to congestion.

National Science Foundation (NSF)
The NSF is the federal agency that is responsible for funding basic research in all fields of science and engineering. The President’s FY 2024 budget request includes more than $750 million to support the development of AI theory and implementation techniques. The National Institute of Standards and Technology request proposes funding increases for research in critical and emerging technologies, with the goal of ensuring U.S. leadership in AI advancement.

Funding for Regulation and Enforcement of AI
The regulation of AI is a complex and evolving issue with local, state, federal and international dimensions. In the U.S., there is no single agency or organization that is in charge of regulating AI. Instead, a variety of government agencies are involved in developing and enforcing AI regulations.

The Federal Trade Commission (FTC) is responsible for protecting consumers from unfair, deceptive and fraudulent practices. While the FTC’s AI regulation and enforcement efforts are still in the early stages, the FTC has been actively ramping up efforts to investigate and enforce violations of consumer protection laws related to AI.

The President’s FY 2024 budget request for the FTC includes $10 million for AI regulation and enforcement, an increase of $5 million for AI regulation and enforcement. These resources are intended to be used for investigations in the privacy and data security space, including AI-related online fraud and impersonation scams. The FTC plans to use AI regulation and enforcement funding to hire additional staff with expertise in AI, conduct research on the potential risks and benefits of AI, develop guidance for businesses on how to comply with the FTC’s consumer protection laws, and investigate and enforce violations of the FTC’s consumer protection laws.

What Is Next? Outlook for FY 2024 Appropriations
The President’s FY 2024 budget request is just that: a request. Congress is responsible for passing appropriations bills which allocate funding to federal agencies and departments. Typically, Congress will pass appropriations bills that are a compromise between the President’s request and the proposals of the various congressional committees. This process can be long and contentious, and it is often not completed until late in the year.

Companies in the AI space are well positioned to benefit from new government spending and contracting opportunities. They are also smart to develop a strong regulatory game plan in the face of increased scrutiny from federal regulators armed with new investigation and enforcement tools. Achieving success in this dynamic space requires an ability to promote priorities across government in a consistent and mutually reinforcing manner through a combination of congressional affairs, executive branch strategic policy and executive branch technical policy.

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