AI is becoming a major focus of the influence industry.

Photographer: Josep Lago/AFP via Getty Images

K Street’s smart money is moving to Capitol Hill from the White House in the next round of artificial intelligence lobbying efforts.

• After spending more than a year focusing on the White House, lobbyists working to shape AI policy say they will turn more to lawmakers tasked with implementing—or thwarting—the Trump administration’s framework it unveiled last week.

“It does shift the focus from 1600 Pennsylvania Ave. down the street to the Capitol,” said Greta Joynes, a former Hill GOP aide who chairs the telecommunications and technology practice at Brownstein Hyatt Farber Schreck. It’s “expanded the scope of engagement” on AI lobbying, she added.

• More hearings and markups will dominate the congressional calendar with plenty of fights within and between the parties on federal preemption for AI rules, children’s safety, and other matters. Lobbying on AI was already a fast-growing area for K Street, and the Trump framework is poised to supercharge it.

The potential power shifts ahead following the midterm elections also mean congressional Democrats are taking on a more prominent role in formulating AI rules and elevating lobbyists with ties to the party.

“Almost all of the energy last year was on the administration,” said Reggie Babin, a senior counsel at the firm Akin and a former chief counsel to Senate Minority Leader Charles E. Schumer (D-N.Y.). “In recent months, there’s been a renewed focus on Congress, especially with the anticipation of change in power with the midterms.”

Lobbying on AI-related matters peaked in last year’s fourth quarter, a Bloomberg Government analysis of lobbying disclosures found.

The topic shows no signs of slowing this year, with lobbying disclosures revealing dozens of new clients tapping lobbyists.

The AI debate in Washington is expected to get so hot that even relative newcomers in the space are seeking the help of K Street lobbyists to have a larger voice in Congress.

The generative chatbot company Character.ai, founded in 2021 by former Google developers, hired Hogan Lovells. The AI cybersecurity startup HiddenLayer Inc. is now working with Holland & Knight.

Clients from all sectors have a stake in the AI debate: tech players, model developers, plus pharmaceutical, energy, health care, and defense interests. They don’t all agree, either.

“From a lobbying perspective, that means this is about to get more crowded, not less,” said Joseph Hoefer, chief AI officer at Monument Advocacy. Read More

Read also:

• AI Data Center Moratorium Introduced by Sanders, Ocasio-Cortez
• Data Centers Divide Florida Republicans and Trump Administration
• BGOV OnPoint: Kids Online Safety Bills Hit Hurdles in Congress

Welcome to Power Play, Bloomberg Government’s newsletter on the lobbying, money, and people moving Washington’s agenda.

Reach out with tips, news, complaints, and most importantly all your exclusives: kackley@bloombergindustry.com.

The administration’s AI legislative framework met a skeptical Congress but has drawn praise from the tech industry.

The proposal directs Congress to preempt state laws on AI developer liability and avoid spinning up a new federal rulemaking agency

Read more in the OnPoint from BGOV’s John Woolley.

Concerns are being raised over the power needed for crypto mining.

Photographer: SeongJoon Cho/Bloomberg

New York Democrats are pitching a new tax on crypto mining facilities that lawmakers say are driving up energy costs in New York, reports our Raga Justin in Albany.

• The proposed crypto mining tax comes as energy consumption costs have supercharged debates around affordability in New York ahead of the midterm elections. Democrats have increasingly questioned the energy demand driven by AI and large-scale manufacturing, and argue it isn’t worth the number of jobs created by those industries.

Industry groups such as Digital Power Now have objected to the measure, calling it a “de facto ban on the entire industry, disguised as tax policy” in a memo obtained by Bloomberg Government and distributed to lawmakers March 23. Read More

Capitol Hill and K Street are digesting the results of the year’s first primaries and looking ahead to the November midterm elections to begin planning their strategies for the new Congress.

BGOV’s latest Hill Watch Live walked through some of the scenarios:

• Retirements and governor bids will generate Senate turnover, as Senior Elections Reporter Greg Giroux outlined.
• A change in party and committee leadership in Capitol Hill would reset the legislative agenda, particularly if Democrats use their mantel to launch investigations into the Trump administration, as Kate and Deputy News Director Loren Duggan discussed.
• Efforts to fund the Homeland Security Department and advance voter ID legislation are dominating the congressional agenda, as Legislative Analyst Brandon Lee reviewed. See More

Vice President JD Vance

Photographer: Sarah Rice/Bloomberg

Wesam H. Hassanein, a Middle East policy aide for Vice President JD Vance, joined Continental Strategy LLC this week, the firm shared first with BGOV.

Continental Strategy, founded by Carlos Trujillo, who was US Ambassador to the Organization of American States during President Donald Trump‘s first term, reported a 1,423% rise in federal lobbying revenue last year. Read More

Plus: Fierce Government Relations is adding James Williams, formerly with the Senate Finance Committee, as a lobbyist focusing on tax, trade and financial services.

Williams was senior tax and economic policy adviser to Finance Chair Mike Crapo (R-Idaho), including leading on Republicans’ signature tax cuts-and-spending law enacted last year.

• He also previously worked for Senate Majority Leader John Thune (R-S.D.) as a senior tax and trade policy adviser and was a staff director of the Finance’s subcommittee on taxation and IRS oversight.

Akin Gump tapped a Democratic legal adviser to co-lead its team of congressional investigations lawyers after Simpson Thacher poached two practice leaders, Justin Henry reports.

Marcus Childress has joined Akin in its Washington office after serving as an adviser for House Judiciary Committee Democrats for more than a year, the firm said today. Childress and Akin partner Abigail Kohlman will lead the firm’s representation of clients facing congressional inquiries.

The move comes ahead of midterm elections that could flip control of the House and ramp up scrutiny of the administration’s dealings with private sector businesses. Judiciary Committee Democrats have scrutinized major law firms that made deals with the White House last year.

“We’ll see Congress more willing to scrutinize private industries and we expect that scrutiny to intensify,” Childress said in an interview.

Akin in February saw the two leaders of its congressional investigations practice—Raphael Prober and Karen Christian—jump to Simpson Thacher.

Revenue last year for Public Policy Holding Co., a lobbying and communications conglomerate with TikTok Inc. among its clients, was $186.5 million, a 24.7% increase and with organic growth of 6.2%, the firm said in an earnings statement.

PPHC was added to the Russell 2000 Index and Russell 3000 Index, the firm said Tuesday. The holding company owns a dozen lobbying, communications, and advisory firms including big K Street shops Crossroads Strategies, Alpine Group, and Forbes Tate Partners.

• This week it also added UK public affairs shop and economics consultancy Westminster Policy Partners Limited to its roster.

PPHC began trading on the Nasdaq in January, a rare move for a Washington-grown lobbying and communications company. The company’s stock traded at $13.27 a share on Tuesday. Its initial public offering in the US was $12.25 per share, according to the company. Read More

Cannabis plants

Photographer: Patrick T. Fallon/Bloomberg

The US Cannabis Roundtable will be on the Hill today, along with Stacey Rusch of the Real Housewives of the Potomac, for its spring fly-in.

Rusch, who is in the cannabis business, and other participants have 25 meetings with lawmakers of both parties on the calendar. They’re pushing for greater access to banking for the sector and other matters, organizers said.

Illinois Lt. Gov. Juliana Stratton

Photographer: Christopher Dilts/Bloomberg

The crypto industry, after tough election losses last week in Illinois, is back on Capitol Hill this week.

Summer Mersinger, chief executive of the Blockchain Association, will be among those testifying this morning at a House Financial Services hearing on tokenization and the future of securities.

The crypto industry’s super PAC network lost in its biggest-spending races so far this election cycle, prompting questions about the sector’s influence on the midterms and buoying its policy opponents in Washington.

• Illinois Lt. Gov. Juliana Stratton’s victory in the Democratic Senate primary, after the super PAC Fairshake and allied crypto players spent millions against her, took some of the swagger out of the industry’s political operation.
• The industry also spent $2.5 million against state representative La Shawn Ford, who won the Democratic primary in the 7th District.

The sector still is poised to be a big player in the midterm cycle. Read More

Read Also: Billionaires Thiel and Uihlein Pump Millions Into Republican PAC