(This column originally appeared in Forbes)
A new report from Goldman Sachs caught my eye. The survey, as reported in Fox News, found that about 68 percent of small business owners said they are “already using AI,” with another 9 percent planning to begin using within the next year.
Small Businesses Adopting AI: The Data
“It’s a significant jump from the 51 percent of small business owners who were using the technology to increase productivity and expand their capabilities two years ago,” the report said. “Most small businesses using AI, about 80 percent, said it is enhancing rather than replacing their workforce. About 74 percent of small business owners using AI plan to grow their business in 2025. That compares to 65% of those not using AI or unsure about adoption. Nearly 40 percent of small businesses using the technology say it will allow them to create new jobs in 2025.”
This isn’t the only survey of I’ve seen purporting that AI growth among small businesses is proliferating. Other reports — mostly from tech companies with their own agendas — have been sent to me confirming this. And a recent study from the U.S. Chamber of Commerce found that in 2025, businesses “have doubled their adoption of AI, increasing from 23 percent in 2023 to 58 percent.”
Small Businesses Adopting AI: The Reality
My advice: be dubious about these studies.
My firm has more than 600 clients in the mid-Atlantic area. I frequently visit other small businesses around the country doing consulting work. I also speak to thousands of business owners at more than 50 industry conferences each year. I talk about AI. I ask them about their usage of AI. And here’s the reality: they’re not really using AI. At least, not yet.
Of course tech companies want to give the illusion that AI is proliferating among small businesses so that business owners will experience FOMO and are made to feel like they should be jumping on the bandwagon too. And of course the media wants its audience to believe the same because it’s a good story and leads into the “AI is going to take away your job” narrative that gets lots of clicks. And the AI industrial complex — software, hardware, infrastructure, data center, consultants, venture capitalists, startups and all the others making money in this new wave want to keep that narrative going.
But let’s get real: AI usage among small business is in its infancy. Barely.
What these businesses are actually doing is dabbling. They’re playing with chatbots like ChatGPT, Gemini, Copilot, Claude and Grok. They’re using these platforms for research. They’re getting help crafting emails. They’re leaning on these platforms to review contracts, write policies and enhance research. Some businesses are using generative AI to create images, update websites and create marketing documents. This is good. This is productive. This is helpful. But it’s not adopting AI.
The really core adoption — where AI agents are being used to reconcile accounts, place orders, send emails, converse with customers, apply cash, analyze transactions and produce quotes, estimates and proposals automatically based on historical transactions — is nowhere near happening at small businesses. There are no robots packing boxes, lifting pallets or cleaning offices. Workforces aren’t being cut. Devices aren’t running on their own. None of this is happening. Yet. Why not? 3 reasons: cost, reliability and trust.
Big companies are spending billions on their AI models and — after a couple of years of doing this — few are reporting a benefit to the bottom line. Although some big companies claim to be using AI to eliminate jobs, a recent report from MIT researchers recently reported that 95 percent of generative AI pilots at companies are failing. Small business owners aren’t going to risk their limited resources on technology that can’t prove its ROI. Big companies have the funds to waste on these projects. Some will succeed and expand and these innovations will ultimately trickle down to smaller companies when their value is proven. But for now, the cost to implement what is still an unproven and immature AI solution at a small business is too prohibitive.
And is AI reliable yet? Certainly not. Hallucinations are still very common and, according to some reports, are even getting worse. Even simple research requests on the most popular chatbots oftentimes return incorrect answers. And some reports say the problem is getting worse. The average age of the U.S. small business is over 55 years old. We’ve been hurt before by bad and buggy software. We’ve wary of this stuff and are hard pressed to rely on it until it’s clear that it’s reliable.
Finally, AI applications and agents raise all sorts of security concerns. Hackers are using AI to deepfake executives and take control of agents for all sorts of nefarious purposes. To use these AI platforms we’re asked to send our most critical and confidential data to the cloud, with promises from tech companies with a poor track record of trustworthiness that it’s protected and secured and won’t be used for any other purposes. Many of my clients are very hesitant to do this.
Don’t believe what you read. “Adopting AI” means monkeying around with a chatbot. Many small business owners are doing this and good for them. But are they really using AI to generate more profits and increase productivity? Not yet.
