Do US Small Businesses Using AI Expect More Hiring and Revenue Growth?

A recent study by the New York Federal Reserve Bank indicates that small businesses using artificial intelligence are substantially more optimistic about future hiring and revenue growth compared to those that do not. According to TechRadar, the data reveals a clear divide in sentiment between adopters and non-adopters, with nearly half of US small businesses already utilizing AI tools.

How widespread is AI adoption among small businesses?

The New York Federal Reserve Bank study found that 46% of US small businesses currently use AI. This near-even split allows for a direct comparison between companies that have integrated the technology and those that have not. However, integration levels vary significantly, with only 51% of adopters having fully or partially embedded AI into their actual business processes.

Many of the remaining adopters appear to be in an experimental phase rather than using the technology for core operations. This distinction is crucial for understanding the gap between early enthusiasm and mature operational impact. The data suggests that while interest is high, deep integration remains a work in progress for many organizations.

What are the expectations for employment and revenue?

AI adopters recorded a 33 percentage point net expectation of higher employment over the next year, according to the report. In contrast, non-adopters showed only a 15 percentage point net expectation, which is less than half the figure for users. This suggests that businesses leveraging AI feel more confident about their ability to expand their workforce in the coming months.

Revenue expectations follow a similar pattern. Businesses that use AI are more likely to anticipate healthy revenue growth. Interestingly, the study notes that companies currently struggling financially may be among the most optimistic about AI’s potential to turn things around. The researchers concluded that the link between AI use and positive revenue expectations is likely genuine rather than spurious.

Has AI actually replaced workers or increased sales?

Despite initial fears that AI would lead to widespread job losses, 77% of surveyed businesses reported no change in their current labor costs. This indicates that AI is primarily assisting existing staff rather than replacing them outright. The technology appears to be acting as a productivity aid rather than a substitute for human labor in most small business contexts.

However, the reality of sales growth lags behind expectations. Only 31% of AI-using businesses have actually reported increased sales as a direct result of using the technology. This gap between expectation and reality highlights that while optimism is high, tangible financial benefits have not yet materialized for the majority of adopters.

What does this mean for operational constraints?

The researchers suggest that AI may be helping some small businesses overcome specific operational or technical constraints that previously limited revenue generation. By addressing these bottlenecks, companies might be positioning themselves for future growth even if immediate sales increases are not yet visible. This operational improvement could be the foundation for the heightened optimism seen in the employment and revenue forecasts.

What to do and how to stay safe: AI

• Audit current business processes to identify specific operational or technical constraints that AI might address.
• Start with small-scale experiments to test AI tools before committing to full integration into core workflows.
• Monitor labor costs and workforce dynamics closely to ensure AI is assisting staff rather than creating unexpected redundancies.
• Track actual sales metrics against initial expectations to measure the true financial impact of AI adoption over time.

Step-by-step guide: How AI Risk Management Works: The Hidden Failure Points

General security guidance from the Sandbox Dispatch newsroom. It is not confirmed advice from the organisations named in this story.

Frequently asked questions

Does the Federal Reserve study say AI is replacing workers in small businesses?

No, 77% of surveyed businesses reported no change in labor costs, indicating AI is assisting rather than replacing workers.

What percentage of US small businesses use AI?

The study found that 46% of US small businesses already use AI technology.

Have most AI-adopting businesses seen increased sales?

No, only 31% of AI-using businesses have actually reported increased sales due to the technology.