Between the regulatory crackdown on cryptocurrency companies, increasing unease over the impact of artificial intelligence on humanity, and the FTC’s intense scrutiny on M&A deals, this has been a year for the books.
Now what? Each year, Term Sheet asks Bradley Tusk, the cofounder and CEO of Tusk Venture Partners, to predict which regulatory battles will be most important for tech companies over the next 12 months and how they will ultimately play out.
Tusk, a former campaign manager for Michael Bloomberg, made a name for himself by successfully lobbying for Uber when Bill de Blasio was trying to cap the number of rideshares in New York. Now Tusk runs the early-stage venture capital firm Tusk Venture Partners as well as the political consultancy firm Tusk Strategies.
Here’s what he predicts for 2024:
AI
—Expect limited federal action: nothing from Congress apart from more “working groups” and lip service. The federal government still hasn’t effectively regulated Web 2.0 and 3.0—forget about AI.
—States will start stepping in and trying to regulate AI—especially big ones like CA, TX, FL, and NY—but, to the extent that anything passes, it will likely be speculative and performative. The reality is that no one knows what types of regulations are needed to govern generative AI and most applications of AI are already regulated industry by industry.
—The EU will lead, and litigation in Europe will define the path forward, for better or worse.
Healthcare
—GLP-1 demand will continue to outstrip supply, even as companies ramp up production. Policymakers will have to figure out ways to tamp down demand, ensure that weight loss drugs are being prescribed correctly, or incentivize increases in production (or all three at once).
—A federal crackdown on telehealth advertising could be coming.
—Policymakers will look to expand mental health programs wherever possible. Mental healthcare is broadly popular and ripe for reform and additional funding. The internet, and society more broadly, are exacerbating mental health crises and the presidential election will make it much worse.
Gig Economy
—The 1099 vs. W2 policy debate is largely dead in the water. Labor has deprioritized the issue and identified Amazon and Starbucks as targets where they can make a bigger impact than with gig economy companies.
—Expect more fights between Online Food Ordering (OFO) companies like DoorDash and Seamless and municipalities over delivery driver working conditions and pay. The OFOs are in a tough spot with few options but to remove tipping—hard to mobilize their users to fight a minimum wage for delivery workers, but expect some to try.
Fintech
—Effective soft landing and dropping rates could lead to another boom in retail investing and market volatility that regulators are unprepared for.
—Despite a potential comeback for crypto asset prices, SBF has left the industry impotent when it comes to advancing their policy agenda in Congress. The exit of Rep. McHenry, a major advocate for crypto and Financial Services Committee Chair, is also a big blow. With the SEC firmly in the driver’s seat, don’t expect any wins for crypto next year.
Transportation
—There will be more scrutiny of AVs in wake of Cruise’s failure—and more preemptive bans as the public sees them as unsafe. It will be an uphill battle for companies. Meanwhile, ADAS systems like Tesla’s Autopilot or GM’s Supercruise will grow more sophisticated and completely unchecked from a regulatory standpoint. The quickest path to AV adoption is by leaving the driver in the driver’s seat.
—A major US city, likely Los Angeles, will move forward on permitting and construction for vertiport infrastructure to support eVTOL air taxi services. Messy local fights will result and companies like Joby and Archer will face their first big political test beyond FAA certification.
Drugs
—Some left-leaning jurisdictions may take additional decriminalization actions on things like psychedelics, but 2024 is likely to see more law and order-focused policies. Don’t expect too much momentum here on legalization and decriminalization by legislators and/or referenda.
—If the DEA takes the recommendation of HHS and moves marijuana from a schedule 1 to schedule 3 drug, expect more Fortune 500 companies to feel comfortable dipping their toes into cannabis products.
—Cannabis banking reform is a rare possibility for bipartisan action, especially if the DEA takes action on rescheduling.
Antitrust
—Lina Khan and the FTC will give Amazon more trouble than they expected in their upcoming antitrust litigation.
A programming note…I am as we speak putting the finishing touches on the Crystal Ball Edition. Because so many of you (more than 170!) sent thoughts on what to expect for the new year, I’ve decided to do something a little different this year. Come the first week of January, Term sheet will be running a Crystal Ball Week for the first time—where we’ll run predictions from our readers each day. Until then, we’re taking a short break for the holidays. You’ll see us back in your inboxes on Jan. 2.
Wishing you and yours a happy holiday season! See you in January,
Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
Submit a deal for the Term Sheet newsletter here.
Joe Abrams curated the deals section of today’s newsletter.
