This report examines the Artificial Intelligence Wisdom for Innovative Small Enterprises Act, which aims to help small businesses understand and adopt artificial intelligence technology. The legislation matters because it addresses the growing gap between large corporations and small companies in accessing AI tools and expertise. The Small Business Committee's analysis covers how the bill would provide resources, guidance, and support to help small enterprises compete in an increasingly AI-driven economy.
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House Report 119-405 - ARTIFICIAL INTELLIGENCE WISDOM FOR INNOVATIVE SMALL ENTERPRISES ACT
[House Report 119-405]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-405
======================================================================
ARTIFICIAL INTELLIGENCE WISDOM FOR
INNOVATIVE SMALL ENTERPRISES ACT
_______
December 12, 2025.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Williams of Texas, from the Committee on Small Business, submitted
the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 5784]
The Committee on Small Business, to whom was referred the
bill (H.R. 5784) to amend the Small Business Act to help small
business concerns critically evaluate artificial intelligence
tools, and for other purposes, having considered the same,
reports favorably thereon without amendment and recommends that
the bill do pass.
CONTENTS
Page
I. Purpose and Bill Summary........................................ 2
II. Need for Legislation............................................ 2
III. Hearings........................................................ 2
IV. Committee Consideration......................................... 2
V. Committee Votes................................................. 2
VI. Section-by-Section of H.R. 5784................................. 4
VII. Congressional Budget Office Cost Estimate....................... 4
VIII. New Budget Authority, Entitlement Authority, and Tax Expenditure 4
IX. Oversight Findings & Recommendations............................ 5
X. Performance Goals and Objectives................................ 5
XI. Statement of Duplication of Federal Programs.................... 5
XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits........................................................ 5
XIII. Federal Mandates Statement...................................... 5
XIV. Federal Advisory Committee Statement............................ 5
XV. Applicability to Legislative Branch............................. 5
XVI. Statement of Constitutional Authority........................... 5
XVII. Changes in Existing Law Made by the Bill, as Reported........... 5
XVIII.Minority Views.................................................. 9
I. Purpose and Bill Summary
On October 17, 2025, Representative Scholten, along with
Representative Downing, introduced H.R. 5784, the Artificial
Intelligence Wisdom for Innovative Small Enterprises Act or the
AI-WISE Act. H.R. 5784 requires the U.S. Small Business
Administration (SBA) to provide educational resources on
artificial intelligence (AI) for small businesses. The bill
would require the SBA to coordinate with the National Institute
of Standards and Technology (NIST) to establish a working group
that maintains AI resources for small businesses.
II. Need for Legislation
The AI-WISE Act addresses the growing knowledge gap small
businesses face in understanding and adopting AI tools. Many
small businesses lack accessible and reliable guidance on how
AI could benefit their business, the opportunities it presents
for improving operations and competitiveness, as well as some
potential risks associated with adopting AI. This bill would
require the SBA Administrator to establish educational
resources and online learning modules dedicated to AI that
small businesses can easily access.
This bill directs the SBA Administrator to coordinate an
advisory working group with NIST. The working group would be
comprised of experts in the AI space, and local resource
partners to keep these materials accurate and widely accessible
to all small businesses. The resources available will cover key
areas such as privacy protection, risk management, and best
practices for AI adoption.
Small businesses will be able to gain the tools they need
to evaluate and adopt AI based on what works best for their
specific business directly from the SBA. With AI rapidly
reshaping the economy, small businesses must be able to keep
pace to remain competitive. The AI-WISE Act ensures that small
businesses are not left behind by the SBA, providing existing
knowledge to harness AI for growth, efficiency, and innovation.
III. Hearings
On February 5, 2025, the Committee on Small Business held a
hearing examining matters related to H.R. 5784 entitled ``Hope
on the Horizon: Prioritizing Small Business Growth in the 119th
Congress.''
IV. Committee Consideration
The Committee on Small Business met in open session, with a
quorum being present, on November 18, 2025, and ordered H.R.
5784, to be reported favorably to the House of Representatives
by a roll call vote of 27 ayes to 0 nos.
V. Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the recorded
votes on the motion to report legislation and amendments
thereto. The Committee voted to favorably report H.R. 5784 to
the House of Representatives at 11:45 AM.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
VI. Section-by-Section of H.R. 5784
Section 1--Short title
This Act may be cited as the ``Artificial Intelligence
Wisdom for Innovative Small Enterprises Act,'' or the ``AI-WISE
Act.''
Section 2--Artificial intelligence educational resources and modules
for small business concerns
This section requires the SBA to establish and maintain
educational resources and modules for small businesses about AI
tools. These resources must be made publicly available on an
SBA online learning platform. The resources include information
on how AI models work, privacy protection, risk management,
human oversight, and practical applications for improving
operations, productivity, and customer service.
This section requires the SBA to consult with NIST and
establishes an advisory working group that will include AI
experts from the private sector, academia, and SBA Resource
Partners. This group would advise on relevant and existing
information to include in the SBA's educational resources and
modules.
This section further requires coordination with resource
partners to disseminate the materials, including developing
specialized or localized training resources. The materials must
be actionable, easy to understand, and neutral regarding
specific AI tools and providers.
The SBA Administrator must establish these resources and
modules within 180 days of enactment.
Section 3--Compliance with Cutgo
No additional funds are authorized to carry out the
requirements in this bill.
VII. Congressional Budget Office Cost Estimate
Pursuant to 3(c)(3) of rule XIII of the Rules of the House
of Representatives, the Committee adopts as its own the cost
estimate prepared by the Director of the Congressional Budget
Office pursuant to section 402 of the Congressional Budget Act
of 1974. At the time this report was filed, the Committee has
requested but not received a cost estimate from the Director of
the Congressional Budget Office.
VIII. New Budget Authority, Entitlement Authority,
and Tax Expenditures
Pursuant to clause 3(c)(2) of rule XIII of the Rules of the
House of Representatives and section 308(a)(I) of the
Congressional Budget Act of 1974, the Committee provides the
following opinion and estimate with respect to new budget
authority, entitlement authority, and tax expenditures. While
the Committee has not received an estimate of new budget
authority contained in the cost estimate prepared by the
Director of the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974, the Committee does
not believe that there will be any new or increased costs
attributable to this legislation.
IX. Oversight Findings & Recommendations
In accordance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the oversight findings and recommendations of the Committee on
Small Business with respect to the subject matter contained in
H.R. 5784 are incorporated into the descriptive portions of
this report.
X. Performance Goals and Objectives
With respect to the requirements of clause 3(c)(4) of rule
XIII of the Rules of the House of Representatives, the goal of
H.R. 5784 is to provide resources to small businesses about AI.
XI. Statement of Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, no provision of H.R. 5784 is known to
be duplicative of another Federal program, including any
program that was included in a report to Congress pursuant to
section 21 of Public Law 111-139 or the most recent Catalog of
Federal Domestic Assistance.
XII. Congressional Earmarks, Limited Tax Benefits,
and Limited Tariff Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee finds that the bill
does not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits as defined in clause 9(e),
9(f), or 9(g) of rule XXI of the Rules of the House of
Representatives.
XIII. Federal Mandates Statement
The Committee will adopt as its own the estimate of the
Federal mandates prepared by the Director of the Congressional
Budget Office pursuant to section 423 of the Unfunded Mandates
Reform Act.
XIV. Federal Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
XV. Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
XVI. Statement of Constitutional Authority
Pursuant to clause 7 of rule XII of the Rules of the House,
the Committee finds that the authority for this legislation in
Art. I, Sec. 8, cl.1 of the Constitution of the United States.
XVII. Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
SMALL BUSINESS ACT
* * * * * * *
SEC. 49. ARTIFICIAL INTELLIGENCE EDUCATIONAL RESOURCES AND MODULES FOR
SMALL BUSINESS CONCERNS.
(a) In General.--The Administrator shall--
(1) establish and maintain educational resources and
modules for small business concerns with information on
artificial intelligence tools; and
(2) make such educational resources and modules
publicly available on an existing online learning
platform of the Administration.
(b) Contents.--The educational resources and modules
established under subsection (a) shall include, to the extent
practicable, information on--
(1) how artificial intelligence models work,
including the limits of the capabilities of such
models, and how such limits affect the outputs of such
tools;
(2) how to determine if software outputs are
generated with the use of artificial intelligence;
(3) how to remain updated on the emergence,
development, and technological maturation of artificial
intelligence;
(4) how to understand and remain updated on the
policies, terms, and conditions applicable to users of
artificial intelligence;
(5) best practices in coordinating with third-party
providers of artificial intelligence tools;
(6) how to effectively identify, evaluate, and manage
the risks of artificial intelligence;
(7) how to ensure the privacy of user inputs to
artificial intelligence tools;
(8) how to retain human involvement in important
decisions informed by recommendations made by
artificial intelligence;
(9) how to identify tasks and functions that
artificial intelligence can reliably and effectively
perform, including whether artificial intelligence can
improve operations, productivity, or customer service;
and
(10) how to determine whether an artificial
intelligence tool adequately fills a need and is worth
adopting.
(c) Accuracy and Maintenance.--
(1) In general.--To the extent practicable, the
Administrator shall ensure that the information
contained in the educational resources and modules
established under subsection (a) is factually accurate
and current, including by consulting with--
(A) the Director of the National Institute of
Standards and Technology; and
(B) the Advisory Working Group established
under paragraph (2).
(2) Advisory working group.--
(A) Establishment.--The Administrator shall
establish a working group (in this paragraph
referred to as the ``Advisory Working Group'')
with which the Administrator shall consult on
an ongoing basis regarding the information
contained in the educational resources and
modules established under subsection (a).
(B) Duties.--The duties of the Advisory
Working Group shall include the identification
and recommendation of relevant information to
the Administrator for inclusion in the
educational resources and modules established
under subsection (a).
(C) Members.--The Advisory Working Group
shall be comprised of the following members,
who shall be selected by the Administrator:
(i) Individuals with demonstrated
expertise in artificial intelligence,
including--
(I) not less than one
individual from the private
sector;
(II) not less than one
individual from academia;
(III) not less than one
individual from an organization
with demonstrated expertise in
ensuring artificial
intelligence outputs--
(aa) are reliable,
secure, transparent,
and not used for
illegal purposes; and
(bb) which protect
user privacy; and
(IV) not less than one
individual with demonstrated
expertise in the creation of
educational or professional
development materials regarding
artificial intelligence.
(ii) Individuals with demonstrated
expertise in outreach to small business
concerns, including--
(I) not less than one
individual from each resource
partner;
(II) not less than one
individual from a district
office of the Administration;
and
(III) not less than one
individual from an association
representing small business
concerns.
(D) Vacancies.--Any vacancy in the Advisory
Working Group shall be filled in the same
manner as the original appointment.
(E) Inapplicability of faca.--The
requirements of chapter 10 of title 5, United
States Code, shall not apply to the Advisory
Working Group established under this paragraph.
(3) Incorporation of information in educational
resources and modules.--In establishing and maintaining
the educational resources and modules under subsection
(a), the Administrator--
(A) shall consider relevant, existing
information developed by resource partners;
(B) may consider relevant, existing
information developed by private entities; and
(C) may incorporate information described in
subparagraphs (A) and (B) into such educational
resources and modules.
(d) Resource Partner Involvement.--
(1) In general.--The Administrator shall coordinate
with resource partners to disseminate information to
raise the awareness of small business concerns about
availability of the educational resources and modules
established under subsection (a).
(2) Specialized and localized educational resource
development.--Resource partners may develop specialized
and localized training resources to more effectively
disseminate the information in the educational
resources and modules established under subsection (a),
including by incorporating information on uses of
artificial intelligence tools common to the community
served by such resource partner.
(e) Manner.--The Administrator shall ensure that the
information in the educational resources and modules
established under subsection (a)--
(1) is actionable and presented in a manner that is
easily comprehensible by small business concerns;
(2) does not give preference to a particular
artificial intelligence model or tool over similar such
models or tools; and
(3) does not give preference to an artificial
intelligence model or tool developed by a specific
entity or group of entities over an artificial
intelligence model or tool developed by another entity
or group of entities.
(f) Artificial Intelligence Defined.--In this section, the
term ``artificial intelligence'' has the meaning given such
term in section 5002 of the William M. (Mac) Thornberry
National Defense Authorization Act for Fiscal Year 2021 (15
U.S.C. 9401).
Sec. [49.] 50. All laws and parts of laws inconsistent with
this Act are hereby repealed to the extent of such
inconsistency.
XVIII. MINORITY VIEWS
Artificial intelligence (AI) is technology that enables
computers and machines to perform sophisticated tasks that
model human reasoning and decision making, and it has the
potential to revolutionize every aspect of our lives. Many
small business owners have expressed interest in adopting AI
tools and software products to improve efficiency, enhance
customer experiences, and gain a competitive edge. In
particular, generative AI (GenAI) tools for content creation,
the most visible AI tools today, have exploded in popularity
and attention.\1\
---------------------------------------------------------------------------
\1\H. Comm. on Small Bus. Democratic Staff, Bots Over Brushes: The
Looming Competition Between Generative AI and Small Content Creators
(Mar. 19, 2024).
---------------------------------------------------------------------------
However, not all small business owners are technologically
inclined. In fact, according to the U.S. Census Bureau, nearly
1 in 4 businesses do not know whether they will or will not use
AI in production during the next six months.\2\ This can be
attributed to a lack of awareness of AI technology, their
capabilities and limitations, and what software qualifies as
AI. Furthermore, AI literacy resources are not uniform or
widespread among communities. In areas where AI literacy
courses are held, offerings vary in quality, scope,
affordability, and accessibility. Concerns have also been
raised that uneven resource distribution could exacerbate the
digital divide among various regions, communities, and
socioeconomic groups. The emerging nature of this technology
gives large corporations an advantage over small businesses
because they have the technical expertise and resources to
adopt it quickly.
---------------------------------------------------------------------------
\2\Business Trends and Outlook Survey, U.S. Census Bureau (Oct. 24,
2024), https://www.census.gov/hfp/btos/data.
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This lack of AI literacy has also resulted in high-profile
harmful and problematic incidents for businesses of all sizes.
In December 2023, a Chevy dealership in Watsonville, CA
deployed an automated customer service chatbot powered by
ChatGPT, a GenAI tool. Users quickly began manipulating the
chatbot, and one user was offered a Chevy Tahoe for $1 with
acknowledgements that the offer was ``legally binding.''\3\
Many incidents are attributable simply to AI's current
immaturity as a technology and the challenges that come with
its continuing development. These issues could have been
avoided by a thorough and critical review of the underlying AI
technology involved and any relevant flaws.
---------------------------------------------------------------------------
\3\Katie Notopoulos, A car dealership added an AI chatbot to its
site. Then all hell broke loose., Bus. Insider (Dec. 18, 2023), https:/
/www.businessinsider.com/car-dealership-chevrolet-chatbot-chatgpt-
pranks-chevy-2023-12.
---------------------------------------------------------------------------
AI also poses other, more difficult risks. First, as a
result of the data and content used in AI training and fine-
tuning, tools could make biased and discriminatory decisions,
or steal intellectual property and content from unknowing
creators. Second, hallucinations and omissions in AI outputs
could mislead entrepreneurs and direct them to break laws and
regulations. Third, AI-generated deepfakes could be used for
disinformation, fraud, and scams. Fourth, cybersecurity
vulnerabilities and other safety issues in AI tools could
render them open to adversarial attacks. Lastly, additional
risks could emerge as AI evolves and gains added capabilities.
The reputational and legal harm caused by flaws in AI tools
deployed by businesses can be steep, which can negatively and
significantly impact small businesses. This underscores the
need for entrepreneurs considering adopting AI tools to
critically evaluate and assess their capabilities. If small
business owners determine these tools are necessary, they
should be equipped to adopt them effectively and help remedy
any related drawbacks. At the Committee's September 17, 2025
hearing entitled ``Streaming Success: Small Businesses in the
Age of Digital Influence,'' Republican witness Kayla Moran
endorsed ``having the [U.S. Small Business Administration
(SBA)] provide guided resources'' on AI, including ``an AI
expert, someone explaining what these terms mean.''\4\
---------------------------------------------------------------------------
\4\Streaming Success: Small Businesses in the Age of Digital
Influence: Hearing before the H. Comm. On Small Bus., 119th Cong. (Sep.
17, 2025).
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This legislation would require the SBA to develop AI
literacy resources through its existing e-learning platform. It
is the Committee's intent for the SBA to provide entrepreneurs
with an objective, balanced, and well-rounded understanding of
AI as a technology, and to help them determine whether AI tools
are needed for their businesses. If a small business owner opts
to adopt and implement AI in their firms, the Committee expects
the SBA to share information on how to best to mitigate risks,
including identifying and reporting bugs and flaws to the
tools' developers. This legislation also would allow the SBA's
entrepreneurial development resource partners--the Small
Business Development Centers, Women's Business Centers, SCORE,
and Veterans Business Outreach Centers--to adapt the SBA's AI
literacy resources for local community use.
Nydia M. Velazquez,
Ranking Member.
[all]