Artificial Intelligence: Uses and Risks for Small Business Contracting and Innovation Research

Federal agencies are increasingly exploring artificial intelligence to improve small business contracting, innovation research programs, and acquisition processes. This GAO report examines how AI could support activities within the Small Business Administration (SBA), Offices of Small and Disadvantaged Business Utilization (OSDBUs), and the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. Potential benefits include improved market research, proposal review, fraud detection, data analysis, report generation, and stakeholder communication. However, GAO identifies significant risks, including inaccurate outputs, bias, privacy concerns, cybersecurity challenges, intellectual property protection issues, and overreliance on automated systems. The report also highlights workforce, funding, and technology authorization barriers to AI adoption and recommends that SBA establish policies and procedures to ensure compliance with federal AI use case reporting requirements and improve transparency.