By Aijaz Alam
How many small businesses use AI?
24.3% of US businesses with 1 to 4 employees used AI in the two weeks to 18 October 2026, according to the Census Bureau's Business Trends and Outlook Survey, up from 17.0% in November 2025. A broader Federal Reserve survey found 46% of small employer firms said the business or its staff used AI for work in late 2025.
- 24.3%US firms with 1 to 4 employees that used AI in the last two weeksCensus BTOS, 5-18 Oct 2026
- 22.6%Firms with 5 to 9 employees, the lowest size bandCensus BTOS, 5-18 Oct 2026
- 46%Small employer firms (1-499 staff) where the business or employees use AIFed Small Business Credit Survey, Sep-Nov 2025
- 83%Of small-firm AI users use it for writing or marketingFed Small Business Credit Survey, Sep-Nov 2025
- 71%Of small-firm AI users say it raised productivityFed Small Business Credit Survey, Sep-Nov 2025
The numbers
The full breakdown
US firms using AI in the last two weeks, by number of employees
| Firm size | 5-18 Oct 2026 | 17-30 Nov 2025 |
|---|---|---|
| 1 to 4 employees | 24.3% | 17.0% |
| 5 to 9 | 22.6% | 15.5% |
| 10 to 19 | 24.6% | 17.8% |
| 20 to 49 | 26.0% | 18.7% |
| 50 to 99 | 29.0% | 20.7% |
| 100 to 249 | 35.3% | 23.7% |
| 250 or more (for comparison) | 43.6% | 30.5% |
| All US employer firms | 24.6% | 17.3% |
Census Business Trends and Outlook Survey, Employment Size Class file. Question: did the business use AI in any of its business functions in the last two weeks. The November 2025 wave was the first with this wording. Standard errors run from 0.32 points (1 to 4 staff) to 1.97 points (100 to 249).
AI use among US small employer firms (1 to 499 staff), Sep-Nov 2025
| Answer | Share of firms |
|---|---|
| Business or employees use AI now | 46% |
| Not using, plan to in the next 12 months | 15% |
| Not using, no plans | 33% |
| Unsure | 6% |
Federal Reserve Banks, Small Business Credit Survey, 2026 Report on Employer Firms (3 Mar 2026), N=5,248 firms that answered the optional AI module.
How far small firms that use AI have gone
| Measure | Share of AI-using small firms |
|---|---|
| Experimenting (testing tools or running pilots) | 49% |
| Partially integrated (used in some business processes) | 44% |
| Fully integrated (embedded in business functions) | 7% |
| AI very important to their core goods or services | 21% |
| AI somewhat important | 42% |
| AI not important | 37% |
Fed Small Business Credit Survey, Sep-Nov 2025. Level of adoption N=2,199; importance N=2,127.
What small firms use AI for (share of AI-using small employer firms)
| Task | Share |
|---|---|
| Writing or marketing | 83% |
| Individual productivity | 61% |
| Planning or analysis | 51% |
| Administrative business functions | 38% |
| Customer service | 29% |
| Process automation | 21% |
| Coding or coding assistance | 19% |
Fed Small Business Credit Survey, Sep-Nov 2025, N=2,225. Firms could pick more than one task.
What changed at small firms that use AI
| Measure | Increased | No change | Decreased |
|---|---|---|---|
| Productivity | 71% | 28% | 1% |
| Quality of goods or services | 39% | 60% | 1% |
| Sales | 31% | 69% | 0% |
| Spending on outside services | 11% | 71% | 18% |
| Labor costs | 7% | 77% | 16% |
Fed Small Business Credit Survey, Sep-Nov 2025; excludes "not applicable or unsure". N from 1,738 (sales) to 2,011 (productivity). Of firms whose labor costs changed (N=373), 10% added employees and 11% cut employees because of AI.
Why small firms with no AI plans do not use it
| Reason | Share of firms with no plans |
|---|---|
| AI is not applicable to my business | 56% |
| Prefer not to use | 30% |
| Finding the right tools to meet business needs | 19% |
| Data security and privacy concerns | 18% |
| Accuracy (bias or misinformation) | 17% |
| Ethical or social concerns | 16% |
| Cost | 13% |
| Too difficult or confusing | 13% |
| Lack of time | 12% |
Fed Small Business Credit Survey, Sep-Nov 2025, N=1,855. Firms could pick more than one reason.
AI challenges for small firms that use AI or plan to
| Challenge | Firms that use AI | Firms that plan to use AI |
|---|---|---|
| Accuracy (bias or misinformation) | 46% | 25% |
| Finding or adapting tools to meet business needs | 43% | 54% |
| Data security and privacy concerns | 28% | 29% |
| Time to implement or train employees | 25% | 37% |
| Cost | 21% | 32% |
| Ethical or social concerns | 18% | 19% |
| Experienced no challenges | 24% | 25% |
Fed Small Business Credit Survey, Sep-Nov 2025. Firms that use AI N=2,203; firms that plan to use AI in the next 12 months N=810. Shares add to more than 100% because firms could name several challenges.
Over time
US firms with 1 to 4 employees using AI, every other wave and the latest
| Wave ending | Used AI in the last two weeks |
|---|---|
| 30 Nov 2025 | 17.0% |
| 28 Dec 2025 | 17.7% |
| 25 Jan 2026 | 18.2% |
| 22 Feb 2026 | 17.5% |
| 22 Mar 2026 | 18.5% |
| 19 Apr 2026 | 19.2% |
| 17 May 2026 | 19.1% |
| 14 Jun 2026 | 20.1% |
| 12 Jul 2026 | 20.8% |
| 9 Aug 2026 | 21.9% |
| 6 Sep 2026 | 23.6% |
| 4 Oct 2026 | 23.9% |
| 18 Oct 2026 | 24.3% |
Census BTOS. Only waves with the "any business function" wording (from November 2025). From the wave starting 19 Oct 2026 Census asks about "Super Intelligence or SI", so later waves start a new series.
Why sources differ
Same question, different answers
| Number | When | Who measured | Why it differs |
|---|---|---|---|
| 8.2% | Sept 2024 to Aug 2025 | SBA Office of Advocacy FAQ, from Census BTOS | Firms under five employees; older BTOS question (AI used to produce goods or services). 7.6% of all businesses, 11.4% of firms over 250 staff. |
| 24.3% | 5-18 Oct 2026 | Census BTOS | Firms with 1 to 4 employees; current question (AI in any business function, last two weeks). |
| 17.9% | 17 Nov 2025 to 8 Feb 2026 | Census BTOS AI supplement | All employer firms, pooled winter waves; not comparable with the two-week series. |
| 46% | Sept to Nov 2025 | Federal Reserve Small Business Credit Survey | Employer firms under 500 staff; counts any use by the business or its employees; convenience sample of 6,525. |
Small-business AI numbers range from under 10% to almost half because the surveys ask different questions. The SBA's 8.2% for firms under five employees comes from the older Census question, which asked about AI used to produce goods or services and was replaced in November 2025. The current Census question asks whether the business used AI in any business function in the last two weeks, and gives 24.3% for firms with 1 to 4 staff.
The Federal Reserve's 46% is higher for two reasons. It counts a firm if the business or any of its employees uses AI for work, which includes an employee using a free chatbot to draft an email. And it is a convenience sample of firms that chose to answer, which can lean toward firms more engaged with new tools. Its firms also run up to 499 staff, while the Census figure above is for the smallest band.
All the sources agree on the direction: use is rising, and bigger firms use AI more.
What it means
How to use these numbers
About one in four of the smallest US businesses now uses AI in a normal two-week stretch, up from about one in six in November 2025. If you run a small firm and do not use AI yet, most of your peers still do not either, but the share has risen in most waves.
The smallest firms are not the laggards. Firms with 1 to 4 staff sit close to the all-firm average, and the 5 to 9 band is lowest. The real gap is with firms of 250 or more staff, at 43.6%.
Most small firms use AI for writing and marketing (83% of users), and most are still experimenting rather than building it into their processes. The payoff they report is productivity (71%), not lower labor costs: 77% saw no change in labor costs.
For marketers and agencies, small clients are already using AI for the content tasks you sell. For journalists, give the source and the question: 24.3% (Census, firms with 1 to 4 staff, last two weeks) and 46% (Fed, any use by the business or staff) are both right.
Method and sources
How it was measured
Method
- US Census Bureau
- Business Trends and Outlook Survey, about 1.2 million US employer businesses in six panels; wave 5-18 Oct 2026; question on AI in any business function in the last two weeks
- Federal Reserve Banks
- Small Business Credit Survey, convenience sample of 6,525 employer firms with 1 to 499 staff, 3 Sep to 14 Nov 2025, weighted to Census data; AI module answered by about 81% (N=5,248)
- SBA Office of Advocacy
- FAQ (Feb 2026), citing Census BTOS for Sept 2024 to Aug 2025 on the older question
- Population
- Census: firms with at least one paid employee, so one-person firms with no payroll are not included. Fed: employer firms with 1 to 499 employees
- Checked at source
- 23 Oct 2026 (repo stats, Census files); 31 Oct 2026, the Fed 2026 Report on Employer Firms PDF (printed pages 26 to 28, checked as rendered charts) and the SBA Advocacy FAQ PDF
- Next release
- Census BTOS every two weeks (new SI wording); the next Fed employer-firm report is expected in early 2027
- Last changed
- 30 Oct 2026
- Data files
- CSV · JSON (stable links)
Sources
- Business Trends and Outlook Survey, US Census Bureau Official data
- Small Business Credit Survey, Federal Reserve Banks Survey
- Frequently Asked Questions About Small Business; Small Business Profiles, US Small Business Administration, Office of Advocacy Official data
Cite this page
APA
MLA
HTML link
FAQ
More questions people ask
What do small businesses use AI for?
Mostly writing or marketing (83% of small-firm AI users), then individual productivity (61%) and planning or analysis (51%). 19% use it for coding (Fed Small Business Credit Survey, late 2025).
Is AI cutting jobs at small businesses?
Rarely, so far. 77% of small-firm AI users saw no change in labor costs. Among the few whose labor costs changed, 10% added employees and 11% cut employees because of AI.
Why do small businesses not use AI?
Of firms with no plans to use it, 56% say AI is not applicable to their business and 30% prefer not to use it. Data security (18%) and accuracy (17%) follow.
Are most small businesses using AI deeply?
No. Of small firms that use AI, 49% are experimenting, 44% have partly integrated it, and 7% have it fully embedded in their business functions.
Every number on this page was checked at its original source (US Census Bureau, Federal Reserve Banks, US Small Business Administration, Office of Advocacy). Free to cite with a link to this page.