Archive for category: Public Affairs

Here’s What You Need To Know…

More than $7 billion traded on Kalshi’s World Cup markets in June before the group stage was even over. Now the NFL season is weeks away, nearly $200 million has already traded on markets tied to this year’s midterms, and almost $700 million is riding on who wins the presidency in 2028.

Prediction markets are no longer the novelty many Americans discovered during the 2024 presidential election. They have become a mass-market business.

That may be exactly when their political problems begin.

CFTC Chairman Michael Selig calls prediction markets “truth machines” and argues they are federally regulated financial markets. Utah Gov. Spencer Cox has warned they amount to “putting a casino in the pocket of every single American.” Senate Commerce Chairman Ted Cruz (R-TX) is openly asking whether the platforms are “defying the law” and infringing on state sovereignty.

It might seem like a niche industry issue, but it’s increasingly taking center stage in political and policy debates.

Republican and Democratic state officials are fighting the industry in court. Congress is investigating potential insider trading. Tribes are warning about threats to their gaming rights. The casino industry wants states back in charge. Even major sports leagues are pressing for tougher restrictions on the contracts prediction markets can offer.

For now, Chairman Selig is perhaps the friendliest federal regulator the industry could ask for. But behind that federal green light is a much less settled question: Are prediction markets actually financial markets, or did a novel reading of commodities law create a way to offer nationwide gambling without calling it gambling?

Prediction markets aren’t the first disruptive industry to get buffeted by the wins of political skepticism, and they won’t be the last. But with football season gearing up and the midterms about to put this debate in front of millions of Americans, the industry is about to learn how hard it can be to predict political fallout if you don’t take time to understand what’s driving it. Here’s what public affairs professionals need to know as the political uproar unfolds.

One Man’s Financial Instrument Is Another Man’s Bet

The basic product is simple. Traders buy contracts based on whether something will happen, and a contract trading at 40 cents pays $1 if the event happens and nothing if it does not.

The legal argument is more complicated.

Kalshi operates as a federally regulated Designated Contract Market under the Commodity Futures Trading Commission. Rather than a sportsbook taking the other side of a wager, its customers trade contracts with each other through an exchange.

That distinction is doing a lot of work.

Selig argues event contracts are “swaps” covered by federal commodities law and that states are engaged in a “power grab” when they attempt to regulate them as gambling.

To critics, the distinction can look almost semantic. Rep. Dusty Johnson (R-SD) captured the problem at a House hearing last month: “To many Americans, these products look an awful lot like sports betting.”

Put money on whether interest rates rise and it sounds like a financial product. Put money on whether the Eagles beat the Cowboys and most Americans already have a word for that.

The disconnect between the legal argument and how the product is perceived is where much of the industry’s political risk begins.

The Industry’s Washington Wager

While the Biden-era CFTC tried to restrict political event contracts, Trump’s CFTC reversed course, withdrew the old proposal, began defending prediction markets against state regulators, and proposed a new framework this summer designed to let many event markets proceed while scrutinizing contracts involving areas like war, assassination, terrorism and certain sports-related events.

The agency has gone far beyond issuing guidance. It has sued states including Arizona, Connecticut, Illinois, and New York to defend what it calls its “exclusive jurisdiction” over these markets.

Adding to the complexity: Selig is currently the only sitting commissioner on a commission normally composed of five members.

And the Trump appointee has to contend with unusually close political relationships: Donald Trump Jr. advises both Kalshi and Polymarket and invested in Polymarket through his venture firm, while Trump Media spent much of the past year developing its own prediction-market offering before scrapping the plan this month.

All of that gives the industry powerful allies today. It also makes the current regulatory settlement easier for critics to portray as politically contingent.

And outside Washington, states are testing just how far the CFTC’s protection extends.

Nearly 40 states and the District of Columbia have joined litigation supporting state authority to regulate prediction markets. Minnesota enacted the country’s first statewide statutory ban before a federal judge temporarily blocked it. Courts in Massachusetts and elsewhere have allowed state restrictions to proceed, while the Third Circuit has sided with Kalshi’s federal-preemption argument. Just last week, a federal judge ruled Utah could enforce its anti-gambling laws against prediction markets.

This is not a clean partisan fight. Republican Utah and Democratic Minnesota may disagree about almost everything else, but both see a federal regulator stepping into territory states have traditionally controlled.

The Category Is Becoming The Target

That creates another challenge for the companies themselves.

Kalshi has made a concerted effort to be the regulated good neighbor. It built its business within the CFTC framework, has fined and suspended congressional candidates for betting on their own races, and says it has blocked dozens of campaign staffers attempting to trade on their candidates.

Polymarket took a very different route. Its crypto-based international platform grew largely outside the U.S. regulatory system after a 2022 CFTC settlement pushed it offshore, while a separate regulated U.S. entity is now being developed.

But political scrutiny does not necessarily respect those distinctions.

The Army service member accused of using classified information about a secret U.S. operation to make more than $400,000 traded on Polymarket. Candidates betting on themselves became a Kalshi story. And when House Oversight Chairman James Comer launched an insider-trading investigation in May, he demanded information from both companies, warning the pattern suggested “Congressional action may be necessary.”

Political scrutiny rarely makes a distinction between industry actors when they’re making an argument against an entire category. Particularly when there are competing interests and stakeholders hoping to stop that industry’s traction. American Gaming Association CEO Bill Miller calls the platforms “backdoor betting operations” and says the CFTC is attempting to redefine sports betting to put it beyond state and tribal control.

Tribal governments have made prediction markets a sovereignty issue. Senators Lisa Murkowski (R-AK) and Brian Schatz (D-HI) recently pressed the CFTC for formal tribal consultation, and the Senate Indian Affairs Committee convened tribal leaders, Ohio’s solicitor general, and a gambling-policy expert for an August 4 roundtable devoted entirely to prediction markets.

The NFL is now pressing regulators to prohibit some easily manipulated sports contracts and raise the minimum trading age. Public-health advocates are mobilizing around addiction concerns, with Minnesota Attorney General Keith Ellison claiming the products are “designed to be addictive.”

Indeed, every expansion into a new type of event creates another potential opposing force. Just last week, senators from wildfire-prone states asked the CFTC to crack down on predicitions tied to wildfires, warning that wagers could create perverse incentives for arson.

The more things Americans can bet — or “trade” — on, the more political fights the industry can inherit.

The Odds Are About To Get Interesting

There’s clearly demand for prediction markets. The harder question is whether explosive consumer adoption can become durable political legitimacy.

The NFL season will dramatically increase the visibility of sports contracts just as states, tribes, gambling regulators and leagues are questioning the rules governing them. Then the midterms will put political markets front and center while campaigns, elected officials and government employees possess exactly the kind of information that can move those markets.

For prediction-market companies, federal regulatory compliance alone may not be enough. They need to understand which contracts are creating political exposure, how opposition is organizing across states and stakeholder groups, where seemingly isolated controversies are reinforcing a broader narrative, and whether policymakers actually distinguish between responsible operators and the category as a whole.

Kalshi can be the best-regulated company in the industry and still inherit a Polymarket scandal. A favorable CFTC can win one preemption case while another state establishes a roadmap for fighting back. One controversial market can give an entirely new group of policymakers a reason to care. A shift in Congressional control or a change in The White House after the 2028 election could bring about a very different regulatory environment

Prediction markets have proven Americans will trade on almost anything. The industry’s biggest wager may be that Washington will keep letting them.

If you or your team need help navigating this shift, Delve Research is here to help you see further, act faster, and navigate a volatile landscape smarter.

Here’s What You Need To Know…

It was the Commerce Department notice heard round the world. But the all-too-real lesson from Anthropic’s Fable access being cut off is bigger than one company, one model, or one export control action. Instead, it was a warning shot for a much larger universe of companies than the AI labs watching Washington’s next move.

In a matter of hours earlier this month, a U.S. Commerce Department export-control directive turned Anthropic’s product launch into an operating crisis, cutting off global access to two of its most advanced models because the government determined foreign access could raise national security concerns.

That is the immediate story. But the broader lesson reaches far beyond Anthropic, frontier AI, or export controls. The boundary between “regulated” and “unregulated” companies is becoming less and less clear as policy risk and political scrutiny achieves escape velocity from traditionally regulated sectors.

A product feature can become a policy flashpoint. A partner relationship can become a national security concern. A congressional hearing can reshape a category. A state attorney general can change a company’s risk profile. A public narrative can harden before leadership realizes one is forming.

Here’s what you need to know to ensure you’re ready when it does.

How a Product Launch Became a Policy Crisis

The Commerce Department’s export control action did not come out of nowhere. It followed months of escalating tension between Anthropic and the federal government over how advanced AI models should be used, who should have access to them, and what safeguards should apply when commercial technology becomes relevant to national security.

The immediate dispute centered on Anthropic’s Fable 5 and Mythos 5 models, including concerns over foreign access, cybersecurity capabilities, and the company’s Project Glasswing program, which had expanded access to more than 150 organizations across more than 15 countries.

Administration officials reportedly flagged SK Telecom, South Korea’s largest wireless carrier and an Anthropic investor, over perceived China-related exposure. Amazon also raised concerns that a prompt sequence could cause Mythos-class models to provide cybersecurity information that was intended to remain restricted.

Anthropic disputed whether that amounted to a true jailbreak, but the government’s concern had already moved beyond one partner or one prompt.

The specific facts are unusual. The pattern is not. And that is the part every leadership team should be studying.

The Regulated Economy Is Expanding

For years, many companies treated government affairs as a later-stage function. First build the product. Find product-market fit. Raise the next round. Hire policy help once the company is large enough to need it.

That sequencing is becoming increasingly risky.

The universe of companies exposed to serious policy and political scrutiny is expanding well beyond the sectors that have long operated under heavy regulation. Technology companies, data companies, infrastructure-adjacent startups, education platforms, health-adjacent tools, fintechs, marketplaces, logistics platforms, media products, workplace software, and AI-enabled services can all find themselves pulled into policy debates earlier than expected.

The trigger is not always a formal regulation. It can be a safety concern. A foreign ownership question. A perceived harm to consumers. A labor-market narrative. A data-security issue. A child-safety campaign. A procurement restriction. A congressional investigation. A state-level enforcement action. A geopolitical dispute. Or even getting caught between the social and cultural debates of our age.

In that environment, political risk does not wait politely for a company to become mature enough to handle it. It can emerge at the speed of a headline, a letter, a hearing, or a platform controversy.

And once it does, the consequences are not abstract. They can affect users, customers, partners, revenue, fundraising, valuation, enterprise adoption, and the basic ability to operate.

Global Scale Now Means Fragmented Policy Risk

The Anthropic episode also exposed a second risk: companies may build globally, but governments are increasingly pulling the rules back into national and regional jurisdictions.

Trade policy, export controls, privacy and data rules, AI governance, procurement standards, competition policy, and digital sovereignty are all moving in ways that will not be neatly aligned.

That is part of what made the Anthropic shutdown so striking. A U.S. export-control action did not only affect one American AI company. It intensified global concerns about dependence on U.S.-controlled AI infrastructure and gave new urgency to sovereign AI arguments abroad.

For enterprise customers, it also raised a business-continuity question that had often been treated as secondary to privacy, accuracy, and vendor lock-in: what happens if access to a critical technology provider is restricted overnight?

This is the policy environment more companies are building into. Not a single market with a few predictable regulators, but a fragmented landscape where governments increasingly see technology as a strategic asset, a sovereignty question, and a source of leverage.

The Strategic Lesson: Learn the Terrain Before It Moves

The answer is not that every startup needs a Washington office from day one. Most do not. But leadership teams do need a much sharper understanding of the political, regulatory, and reputational terrain they are operating in before that terrain moves under them.

That means knowing where the product intersects with public concern. It means understanding which agencies, committees, governors, attorneys general, advocacy groups, competitors, industry voices, and foreign governments could shape the company’s future. It means anticipating the arguments that will be made about the company before those arguments show up in a headline.

It also means treating policy and reputational risk as part of enterprise strategy, not just crisis communications.

The companies that navigate this environment well do not wait until they are in trouble to understand government, stakeholders, regulators, and narrative. They build that awareness into their operating model early. They pressure-test product decisions against political realities. They map the stakeholders who could influence their trajectory. They monitor weak signals before they become direct threats.

That kind of public affairs judgment is not a nice-to-have once a company reaches scale. For many companies, it is becoming part of the operating model itself.

Policy Risk Is Now Operating Risk

For founders, investors, and operators, the Anthropic episode is an all-too-real fable: if your company is building something powerful enough to matter, it may be powerful enough to attract political attention before you have the operating muscle to manage it.

Political and regulatory risk are no longer externalities that sit outside the business until a company becomes large, controversial, or obviously regulated. They are increasingly part of the market itself.

The lesson of this Fable is straightforward: do not wait until the government, the press, your competitors, or your critics define the risk for you. By the time unexpected political attention turns into action, you do not want to be learning the landscape for the first time.

If you or your team need help navigating this shift, Delve Research is here to help you see further, act faster, and navigate a volatile landscape smarter.

HERE’S WHAT YOU NEED TO KNOW…

While the Musk-Trump feud grabbed most of the tech world’s attention the past few weeks, there’s a provision in the “One Big Beautiful Bill” that will have a longer-term impact on tech policy than their war of tweets:  a ten year moratorium on most state-level AI regulation.

For those not paying close attention, the provision shows how fast Washington’s thinking on AI regulation has gone from avoiding “mistakes of the past” to ensuring we can “win the future.”

When Generative AI first appeared on the scene, Big Tech was under big scrutiny. Policymakers on both sides of the aisle vowed to ensure this new technology had guardrails they believed social media lacked for too long. Now, just two and a half years later, the debate has shifted dramatically.

While the Trump Administration is leading the charge, this shift is bigger than just one administration. Here’s what you need to know to understand why this shift is happening and what it means for everyone from new AI startups to incumbent industries integrating AI into their operations.

HOW WE GOT HERE

Less than two years ago, our first public risk assessment of AI policy focused on the bipartisan eagerness to regulate first and ask questions later on AI. Many policymakers lamented the hands-off approach to regulating the internet in the 1990s — and again with the emergence of social media platforms in the 2010s. Eager to avoid these “mistakes of the past” — policymakers took a more proactive stance on generative AI.

Talk of “responsible AI” and “AI safety” was everywhere, with even OpenAI CEO Sam Altman urging lawmakers to take the issue more seriously. New working groups and bipartisan interest in regulating AI signaled legislative momentum. Yet Congress remained in gridlock while the Biden Administration took (easily undone) executive actions. Even the tidal wave of AI legislation at the state level largely failed to reach enactment’s shores.

Then, DeepSeek’s breakthrough provided what many viewed as a “Sputnik moment” — a jarring signal the U.S. was falling behind in the AI race. It galvanized concern in both Washington and Silicon Valley, reframing AI for many not as a risk to be tamed but as a competitive edge to be harnessed. Suddenly, the conversation shifted from cautious oversight to national urgency that complemented the incoming Trump Administration’s America First priorities.

WHAT’S DRIVING THE SHIFT

So, is this just a result of a shift in administrations? In part, yes, but there are deeper forces at work that anyone navigating the AI policy landscape needs to understand.

The national security and economic competitiveness threat of China: Even before the recent policy shift, advocates of American competitiveness – including Vice President J.D. Vance – argued the U.S. is in an AI arms race — one it must win to retain global leadership. This sense of urgency led to growing calls for a coordinated national strategy, with a U.S. congressional commission even proposing a “Manhattan Project-style initiative to fund the development of AI systems” built to fast track U.S. dominance over China in generative AI development. Proponents argue that only through bold, centralized efforts can America outpace China’s rapid advancements and maintain its competitive edge.

Trump’s “Tech Bro Orbit” arrived just as “Little Tech” found its voice: It’s not just that Trump brought Elon Musk, Peter Thiel, and a pantheon of their “acolytes” to Washington, “Little Tech” is finding its voice in Washington more than ever before. Long overshadowed by Big Tech’s lobbying machines, there is a new wave of venture capitalists like Andreesen Horowitz and accelerators like Y Combinator becoming more vocal about shaping a regulatory framework that encourages innovation and supports decentralization. Now that Little Tech has secured a seat at the table, it’s not likely to give it up. With allies across party lines and momentum in both Washington and state capitals, this emerging coalition is here to stay and positioned to influence AI policy well beyond the Trump era.

Responsible AI got tangled in the culture war: Many AI safety efforts leaned on familiar frameworks from the same trust and safety teams behind content moderation and equity policies. But those frameworks were already politicized, and they brought the same blind spots. As well-intentioned initiatives drew backlash, “Responsible AI” became just another front in America’s ongoing ideological battles. Voices like Elon Musk and Senator Corey Booker amplified the divide, eclipsing real concerns. Now, AI accelerationists have momentum and the focus is on AI’s value rather than its risks.

PREPARING FOR WHATS NEXT

Trump began his term by removing Biden’s executive order on AI and preparing DOGE cuts to the AI Safety Institute (now renamed the Center for AI Standards and Innovation) while removing other guardrails viewed as hindering America’s AI advantages. All of this action has culminated in the House-passed “one big beautiful bill” that includes a 10-year moratorium on most state-level AI rules.

We often like to say that in politics, as in physics, every action has an opposite reaction. The difference is that in politics it’s usually unequal. As the Senate prepares to debate this bill, a cross-party clash is emerging between federal policymakers eager to assert national control and state officials determined to preserve local authority. This brewing standoff could test federalism in the AI age — and public affairs professionals should be watching closely.

As these opposing priorities come to a head, public affairs professionals need to be ready to navigate a fast-moving and fragmented political landscape — tracking the key players, narrative shifts, and regulatory moves as they develop.  If you or your team need help navigating this shift, Delve Research is here to help you see further, act faster, and navigate a volatile landscape smarter.

 

The votes have been counted, and Donald Trump is set for another term in The White House. The business community may feel echoes of 2016, but this second term brings even more intensity. The media frenzy that characterized Trump’s first term—where the media stirred controversy in his every action—is only set to increase. However, the landscape today is even more polarized, and the divisions run deeper.

What we’re entering isn’t just a repeat of 2016; it’s an amplified version where companies face entrenched tribal warfare between a populist-driven agenda and progressive resistance. Cutting through the noise will require companies to leverage new tools and analyze the right data to decode what’s really happening and how to respond effectively. Here’s what public affairs professionals need to know about helping their organizations navigate these next four years…

More Noise, Fewer Insights

In Trump’s first term, media coverage often centered on the sensational, with a focus on personality and pontification rather than policy. Today, we’re in the “podcast election” era, where commentary dominates and tribal media feeds echo chambers instead of balanced analysis. That means the news media no longer shapes public perceptions the way they once did, and they must compete harder for the public’s attention.

For business leaders, that means the media is part of a noise machine that makes it harder to stay focused on real impacts. These leaders must look beyond the noise and prioritize objective, actionable information about the policies that will directly affect their industries. With more than 4,000 political appointments to fill and agencies’ control at stake, business leaders need to pay close attention to how these appointees may shape regulatory landscapes. Trump’s second term will influence business environments not only through executive actions but also through these agency leaders’ priorities, requiring companies to identify real signals of policy direction obscured by the media frenzy.

Populism Becomes Policy

In 2016, Trump’s policies often aligned with traditional Republican approaches even if the accompanying rhetoric did not. This time, MAGA populism has become the defining agenda amidst party realignment. The November 5th election results culminate a shift in voting patterns: low-income voters turned out for Trump in large numbers, creating a populist mandate that focuses on working-class Americans over conventional corporate interests. For example, Trump’s 2024 tax priorities centered on eliminating taxes on tips and overtime rather than defending corporate rate reductions from his 2017 Tax Cuts and Jobs Act (TCJA).

For businesses, this shift means that labor and tax policies may prioritize populist goals that challenge long-held corporate assumptions. Leaders must stay alert to weak signals that might hint at these policy directions, such as early statements from advisors, proposals floated by Trump-world influencers, or legislative drafts, allowing them to adjust strategies in advance. Closely monitoring these indicators will enable businesses to prepare for policy changes before they disrupt operations.

Meet The Prepared Resistance

If Trump’s first term faced spontaneous resistance, his second will encounter organized opposition. Left-leaning groups inside and outside government are battle-tested and prepared for this moment, leading to an entrenched “tribal warfare” dynamic that may impact every policy move. While activist groups can bring pressure, government officials can do even more. As New York Attorney General Letitia James averred after the election, “We have been working both in my office and with other Democratic AGs across this country to make sure that we would be ready to respond.” As businesses learned since 2017, companies can become collateral damage in this political lawfare, in addition to the uncertainty they face from regulatory ping pong in which actions on one side meet fierce opposition from the other only to be reversed when political control shifts again.

Just as in physics, in politics, every action has an opposite reaction, but in a polarized system, these reactions are rarely equal. Too often, businesses get caught in the middle and suffer as a result. Companies must ensure they have the right strategic insight, removed from the emotion, hype, and agenda of the press, recognizing that policies may shift under pressure from opposing forces, or the company could face backlash over the policy positions it does (or does not) take. Detecting weak signals will be critical for anticipating these shifts early and preparing for outcomes that may not align with traditional expectations.

Leveraging New Tools to Stay Ahead

Since 2016, the tools available to track, interpret, and respond to political signals have become more sophisticated. AI and data analytics now offer businesses the ability to monitor legislative language, policy discussions, and subtle regulatory cues much more effectively. At my company we built a new AI platform to help companies detect these weak signals. This election cycle, the platform helped one major industry track the 6,476 other state and federal elections lost in the shuffle amidst the presidential race coverage, spot emerging issues across jurisdictions, and connect the dots between seemingly unrelated developments. To discern the policy reality from the political rhetoric coming from both sides and their media allies, companies will need similar innovations to gain crucial lead time in responding to policy shifts before it is too late.

In an era of information saturation and heightened tribalism, it’s easy to become distracted by the spectacle. By focusing on substantive policy developments and understanding the motivations behind them, companies can build resilience and thrive. Trump’s return to The White House may seem like a chaotic repeat of the past, but for companies that prioritize actionable insights, invest in advanced monitoring tools, and build teams with diverse perspectives capable of cutting through the noise of the media outrage machine will be best positioned to succeed.

What an election season it has been! And while the main event is just getting started, it has already overturned much of the accepted wisdom for public affairs professionals. We have a Republican nominee convicted of felonies and indicted for more and a Democratic nominee who received not a single vote in a single primary and spent the past three years viewed largely as an incapable politician.

Yet, despite both nominees shifting their positions on some of their respective bases’ orthodoxies, neither faced meaningful resistance in securing their nominations and both bases are showing marked enthusiasm for November. So how did we get here and what does it mean for public affairs professionals navigating their organizations or clients through the electoral chaos and whatever follows?

Tribalism has overtaken politics and policy, in which group identity and belonging trump political inputs and policy outputs. That means effective advocacy must begin with an understanding that policy influence is now deeply intertwined with navigating the complex and shifting dynamics, totems, and world views of the respective political tribes. Here’s what you need to know to adapt your organization to this new reality.

Political Tribalism 101

While many agree tribalism has taken over American politics, there’s less consensus on why. Some commentators reflexively lump tribalism in with the rise of Donald Trump, but more nuanced takes point to deeper root causes. These include group identity dynamics, the rise of moralized identities, heightened emotion in politics, social media, and more.

Whatever the cause, what matters for public affairs professionals is understanding how deeply rooted these new dynamics have become. In this tribal environment, political stances have turned into moral battles, making common ground harder to find. The media’s own side-taking only adds fuel to the fire, ensuring each tribe can broadcast its message to followers and keep them in an echo chamber.

All Aboard the 2024 Tribalism Train

Today’s tribal leaders, Donald Trump and Kamala Harris, represent just how divorced our politics have become from the old ways. These leaders aren’t just politicians; they represent intense, unshakeable loyalty that eclipses shared ideology and policy and survives political punches that would have knocked out past candidates. The examples are many:

 Despite multiple indictments and a felony conviction, Donald Trump’s supporters remain steadfast, driven by animosity toward their opponents. Not only did his conviction hardly register in polling data, but many voters say they would support him even if they believed he has committed his alleged crimes. When it comes to who they trust in the first place, Trump voters believe Trump more than they believe their “friends and family or religious leaders,” the very sort of people you’d expect to be in a typical person’s tribe. Add Trump’s ability to shift on mainstay Republican issues, like embracing electric vehicles or reversing his stance on banning TikTok, and the picture of Trump as a deep-rooted tribal leader becomes more clear.

On the other side of the aisle, Kamala Harris’ quick ascent reflects her own side’s deep tribal loyalty. Remember when Democrats had concerns about her viability as a candidate and her image? Or the moment when Democrats expected the chance to vote on Joe Biden’s replacement at the convention? These qualms were quickly washed aside when Biden dropped out and anointed Harris his heir. Even green groups who pressured Biden throughout his tenure now want to ensure they don’t “sabotage her.” Harris, too, is flipping on mainstay progressive positions like fracking and immigration without serious pushback (possibly because voters remain unconvinced of the shifts).

Pick a side—the middle ground is quicksand. The so-called “moderate middle” is hard to find these days among voters and even harder to find among elected officials. Inadequate loyalty to your tribe results in increasing isolation. Just ask Senators Joe Manchin and Kyrsten Sinema, or former Representatives Liz Cheney and Adam Kinzinger. The wave of over 50 congressional retirements in the 2024 election cycle also reflects growing dissatisfaction with the polarized climate driven by the tribal warfare.

How to Run a Business in a Tribal Environment

For businesses, understanding these dynamics is crucial. Tribal loyalties are unpredictable and prone to sudden shifts, as they aren’t grounded in consistent ideology or policy. Accommodating these loyalties can lead businesses down a complicated path with unanticipated consequences. Instead, public affairs professionals must help their companies navigate the nuances of this divided environment, focusing on strategies that maintain broad appeal without getting swept away by the shifting tides of tribalism. Here are some pointers:

Traditional election indicators have lost their meaning. Metrics like economic data and unemployment rates no longer predict election outcomes or voter behavior as reliably as they once did. Even more subjective questions asking voters if the country is on the wrong track or if they approve of a President’s job approval are less helpful in determining which party is likely to prevail. Instead, public affairs professionals now need to pay attention to a host of other indicators—from fundraising to grassroots infrastructure to momentum shifts to swing-state developments—as they try to discern who will come out ahead on election day, even while recognizing their best efforts to predict may not matter in the era of photo finishes.

Beware embracing coded language that forces you toward one team and away from the other team. These days, specific words, phrases, and slogans are not just forms of communication—they are markers of where individuals and groups stand on the political spectrum, even if they seem like reasonable principles on their surface. Phrases like “Make America Great Again” or “Black Lives Matter” encapsulate entire worldviews, designed to evoke strong emotional responses. While these slogans can effectively mobilize a base, they can also alienate those outside the group, leading to increased polarization. So your company’s embrace of “diversity” or “merit” for instance, could unintentionally associate you with progressive or conservative values. Language has become shorthand for a broader set of beliefs and values, allowing individuals to quickly identify friend or foe.

You’re either with them, or against them. If your marketing campaign, product launch, or hiring policy cross the behavioral norms of one of the tribes, you’ll quickly find yourself at odds with that tribe—which is a big problem if that tribe is part of your consumer base. Just ask Bud Light, Chick-fil-a, Harley-Davidson, and many other companies who have faced tribal backlash. Political debate is even bubbling up within companies themselves, despite employers trying to keep the workplace politics-free.

Ride the Tribal Tide

As we head into the 2024 election and beyond, the complexities of political tribalism will only intensify, making it essential for businesses to stay informed and adaptable. The old playbook for navigating political landscapes is outdated; instead, companies must learn to ride the tribal tide, recognizing the deep-seated loyalties driving public sentiment. Understanding the full range of your stakeholders and which tribes they call home is key to survival. At Delve, we’re here to help you guide your organizations through these challenges, offering the insights and intelligence you need to respond effectively to these tribal forces. Together, we’ll help you anticipate the election’s outcomes and their broader implications, ensuring your business remains resilient and responsive in a rapidly shifting political environment.

If you read the news then you’ve noticed the many, many articles these past few months warning that the first AI election in the United States will be an untamable swirl of disinformation that threatens our democracy. The narrative, which a Biden deepfake in the New Hampshire primary strengthened, has captured the minds of numerous policymakers and policy advocates who are pushing legislation across the country to restrict campaign deepfakes and urging regulators to consider new rules around the use of AI in elections.

So are robots replacing the Russian troll factories in spawning out-of-control deepfakes, and will that really shift the outcome of the election? Misinformation, whether driven by bots or not, has become a fixture of campaign cycles for some time. And AI could actually be a boon to campaigns that would otherwise struggle against well-funded opponents. That reality won’t stop the rush to regulate, or the media’s fixation on any instance confirming their bias. Here’s what public affairs professionals preparing to navigate their first AI election need to know.

Lawmakers Rush to Regulate

Whether AI-fueled disinformation is a game-changer or not, many policymakers are hoping they never have to find out. State lawmakers are rushing to regulate the use of deepfakes in elections, with 11 states already enacting laws and another 27 considering legislation. Yet this issue isn’t new: it follows efforts in several states intended to combat election disinformation, starting in California in 2018 and gaining steam after the 2020 presidential race. Federal lawmakers, meanwhile, have introduced their own proposals to limit deceptive deepfakes, and policymakers and activists alike want the FEC to update their regulations to cover deceptive AI uses. Local election officials, meanwhile, are asking Congress for resources to help them combat AI threats.

Will New Deepfake Rules Matter?

The specter of misinformation and disinformation policymakers are racing to contain has haunted us for a number of election cycles. Remember Pope Francis’ alleged endorsement of Donald Trump in 2016? The sprawling pizzagate conspiracy? In 2016, the average American saw one or more fake stories on social media leading up to the election. Indeed, fake photos and videos have long been possible without today’s AI technologies, and simple tools like Photoshop have been effective in duping voters in the past.

Of course, generative AI makes fake content even easier to spin up at scale—especially in the hands of bad actors. But an increase in the supply won’t necessarily change the demand-side economics of election news, like how much election-related content voters consume, how much they care about that content, or how willing they are to be persuaded by anything outside of their partisan bubble. Plus, the hype around the AI threat this year has spurred tech giants to promise more vigilance in their policing of fake content. In other words, fake content may be everywhere this election cycle, but will its impact on election outcomes be noticeably more significant than fake information of years past?

Even if the intensity and scale of disinformation increases due to AI, there’s another side to the equation. Generative AI tools can be a force multiplier for the very people who are supposed to influence the outcome of an election: campaigns themselves.

AI Tech Can Be a Boost for Campaigns

Campaigns run on three things: people, money, and time. But the old campaign adage—that you can always find more people and money, but never more time—may be upturned this year by generative AI. The new tools available this cycle can supercharge much of the monotonous work that campaigns undertake, meaning they’ll need fewer people and fewer dollars to be competitive (our CEO unpacked the possibilities of generative AI in campaigns in an interview with University of Virginia’s Center for Politics last year). This AI boost comes just in time as campaigns struggle to hire and fundraise in this post-covid, politically burnt-out environment.

Generative AI can also help level the playing field among candidates, giving those with fewer resources the ability to create more content, connect with more voters, and better predict voter preferences even without a deep donor rolodex. Of course, for AI to be an equalizer of political opportunities and voices, it must be made available for candidates to use.

Yet if companies issue blanket bans on political use cases, as OpenAI did in their recently updated usage policies, those candidates who most benefit will be incumbents who have traditional financial resources at their disposal. The underdogs will lose out on AI’s force-amplifying technology, while the bad actors will simply turn to jailbroken models or download uncensored, publicly available models that can be trained to do their dirty work. It’s clear technology companies want to avoid getting dragged into another conundrum around liability and content moderation, but the answer to the AI accountability challenge can’t be to run away entirely from transparent, legitimate use cases by campaigns and other responsible actors.

Companies Stuck in the Middle

OpenAI isn’t the only AI company facing a tough decision this election season. Every company building AI models, deploying AI tools, or surfacing AI content to voters is squeezed between the demands of concerned policymakers and stakeholders on one side and those who hope to use AI in campaigns on the other—whether they be bad actors or honest ones. The AI obsession of this election cycle will bring greater scrutiny than ever before to these companies as lawmakers, stakeholders, and the public expect them to police gen-AI content. Expect large tech companies to continue trying to get ahead of the problem and for lawmakers to continue dropping proposals that would require industry to take action against AI misinformation.

Nor are AI companies alone—companies across every industry will need a plan to manage and address misinformation and disinformation as the election heats up and even after the votes come in. Whether your company or client is building an AI product that could be used to influence elections, tracking campaign tech policy issues that impact the bottom line, or using AI tools that could face new election-related rules, you’ll need a plan to survive both the hype and reality of AI’s impact on the campaign season this year.

Public affairs professionals can’t afford a wait-and-see strategy when it comes to the first AI election and how it could shape the policy landscape. Instead, they are deploying a smart playbook to ensure they stay ahead of the curve. At Delve, we can help you separate the policy signal from the campaign noise, whether it is coming from bots or Biden (or Trump or any of the other candidates up and down the ballot).