Small business owners with no employees are starting firms at a faster pace in the United States, and artificial intelligence tools are doing much of the work that once needed a team. New research on business applications shows the shift is clearest in industries where AI tools are used most, and the owners behind the numbers say the tools let them take on bookkeeping, customer service, advertising, design and stock control without hiring staff.
Alex Willen is one of the small business owners running 12 online brands with no employees, and he expects those brands to bring in between 2.5 million and 3 million dollars this year. He bought a hunting gear brand called Lone Trail, and he said its Shopify site once accounted for about 1 percent of sales. After he rebuilt the site with help from ChatGPT and Claude and used AI to run Meta advertising, Shopify accounted for about 30 percent of the brand’s revenue in a recent 30 day period.
Kristin Ginn, another of the small business owners in the report, left Microsoft in March 2026 and started trnsfrmAItn, a consultancy that helps other firms use AI. Seven months later she had about 250,000 dollars in business received or signed through the end of the year, with no employees and no regular contractors. She uses AI to help with proposals, pricing and strategy, and she is looking at an AI agent to take on part of a labor heavy client process. She spends less than 60 dollars a month on paid AI tools.
The pattern goes beyond two small business owners. Liya Palagashvili, a labor economist at George Mason University’s Mercatus Center, studied new business applications and found that in industries highly exposed to AI, applications with no early sign of hiring rose 26.8 percent from the first quarter of 2024 through the first quarter of 2026, from about 222,000 to 281,000 per quarter. Over the same period, applications in those industries with stronger signs of becoming employer firms fell 6.4 percent.
Small business owners and the new numbers
Palagashvili said the findings are early and descriptive, and they do not prove that AI caused the rise. The Census based measure she used picks out applications without signs of near term payroll or hiring plans, and it does not show that those firms stayed one person firms or never hired later. In construction and wholesale trade, which she used as a comparison group, applications of the same type fell 0.4 percent over the same period, which points to something different happening in AI exposed work.
A survey by FreshBooks, an accounting and invoicing software company, found similar behaviour more widely. Seventy nine percent of small business owners who run firms alone said they had tried AI before hiring someone for a task they could not do themselves, and the figure was 86 percent when microbusiness owners were included. FreshBooks chief executive Shaheen Javadizadeh said AI lets those firms look much bigger than they are, since one person can now cover work that once took several people.
Willen said the savings are direct for small business owners. Anthropic’s Claude helps with bookkeeping, customer service, advertising and stock across his brands, while OpenAI image tools do work that once went to photographers and designers. A product photography shoot could cost 2,000 to 5,000 dollars, he said, and a designer 300 to 1,000 dollars for new listing images. Without AI, he said, he would probably need one other full time person plus contractors for photography, design, bookkeeping and ad management.
What small business owners spend and save
Stanford economist Erik Brynjolfsson said AI is creating a longer tail of small producers, while it is also likely to give still more power to the large platforms that connect them with buyers. He said medium sized firms may be worst placed, caught between very small teams that can do more with AI and giant firms that use AI and scale together. In a September research report, Brynjolfsson and Zoe Hitzig, a researcher at the Anthropic Institute, argued that firms will grow larger on average as AI gathers knowledge that was once spread among workers.
Small business owners still rely on big platforms
Small business owners like Willen still depend on large platforms for sales. About 80 percent of his overall revenue comes through Amazon, and he uses Meta and Shopify to build direct sales. Ginn has no staff, but LinkedIn has been one of the biggest drivers of customers to her consultancy. Brynjolfsson said the growth of small producers can raise the value of the platforms that bring buyers and sellers together, since Amazon and similar firms gather the long tail of products in one place.