Key Findings
- Most small businesses now use AI, and the ones that are growing use it the most. Nearly three-quarters (74%) of SMBs use AI at least occasionally. Those whose revenue increased last year are nearly twice as likely to use it often as those whose growth was flat.
- AI users report financial gains and faster work, mainly in back-office and support functions. More than four in 10 SMBs (44%) say the financial impact of using AI has been positive, and 72% of AI users agree that they get work done faster. The four most common applications are customer service, marketing, bookkeeping and sales, costs that small businesses often carry as payroll or outsourced services.
- SMBs tap AI to grow without adding people. Six in 10 AI users say they produce more work without adding staff. Twenty-six percent skipped a full-time hire, ended a contract, cut hours or laid off someone in response to the impacts of AI. Firms were about four times as likely to skip a hire as to lay off a worker.
- SMBs save more with AI than they lose to customers using AI. Frequent AI users estimate saving the equivalent of 16% of revenue by using the technology instead of paying for outside help. At the same time, frequent AI users estimate losing 7.0% of revenue as customers use AI instead of their services.
- Human is now a small business product. Nearly one-quarter (23%) of SMBs say they gained customers who specifically want a person doing the work, 14% now get paid to fix AI-generated output, and 21% have emphasized the human touch as a selling point or have plans to do so.
Frequent AI Use Is Linked With Stronger Growth
Most SMBs have tried AI, but growing businesses use it more often than those with flat revenue.
While most SMBs have started using AI, adoption ranges from the trial stage to a regular part of how work gets done. Nearly nine in 10 (88%) SMBs have used the technology, and 74% use it at least occasionally. Frequent or very frequent users form the largest group, at 44% of all SMBs, followed by occasional users at 30%. The remaining 26% rarely or never use it. Notably, about half of businesses that have tried AI end up using it regularly, pointing to a split between SMBs that use AI regularly and those that use it only sometimes.
The dividing lines become clearer when businesses are grouped by their revenue performance. Among SMBs whose annual revenue grew in 2025, 57% use AI frequently or very frequently, nearly double the 29% among those whose revenue stayed about the same. Both groups have tried AI at roughly the same rate, close to nine in 10. However, similar adoption rates hide different use patterns, with regular reliance on AI more common among businesses whose sales increased.
A closer look shows that revenue growth becomes more common as AI use rises. Among frequent users, 68% reported revenue growth in 2025, compared with 43% of occasional users and 37% of those using AI rarely or never. Frequent and occasional users also reported declines at similar rates, at 8.7% and 9.6%, respectively, versus 21% for rare or never users. These trends indicate a connection between frequent AI use and revenue performance, but they do not establish that AI use causes revenue growth.
AI Helps SMBs Get More Done With Existing Resources
The benefits of using AI generally outweigh its costs, but not for every business.
For SMBs, the promise of faster work raises a practical question about whether AI pays for itself. Across the SMBs surveyed, 44% describe AI’s financial impact as completely or mostly positive, while another 22% report equally positive and negative effects. Only 7.5% rate AI’s financial impact as completely or mostly negative. Importantly, 27% report no impact so far, a reminder that widespread use has not translated into unambiguous gains for every business.
Most AI users say the technology is helping them expand what they can achieve with existing resources. Speed ranks as the most widely cited benefit among the 474 SMBs that have used AI, with 72% reporting that they complete tasks faster. Nearly two-thirds say the technology helps them compete with other companies (64%) or has increased their revenue (63%). Six in 10 say they produce more work without adding staff, and 45% say they can take on work they could not previously handle.
However, the gains achieved by AI come with expenses and, sometimes, rework. More than one-quarter of users, 28%, say their AI spending exceeded expectations. About 22% report extra work caused by AI errors, and a similar share have paid someone to fix or redo AI work. These drawbacks are less common than the benefits, although the experiences can overlap. For example, a business may finish tasks faster overall and still need human help to fix some errors.
SMBs use AI across everyday business functions.
SMBs are most widely using AI for customer service and calls, at 58% of users. More than half also use it for marketing and advertising (55%), bookkeeping and tax (54%), and sales and business development (53%). These functions cover work typically done by humans, whether permanent staff or outside contractors or agencies. Using AI for these tasks does not necessarily mean it replaced a paid worker.
Another common application includes human resources, recruiting and payroll work, at 41%. More than one-third use it for graphic design, administrative support or writing. Software and websites follow at 32%. These use cases span a wide range of work a small business needs to operate and promote itself, including work it might otherwise commission.
SMBs Use AI to Do More Without Adding Staff
AI most often changes hiring decisions by filling roles businesses otherwise would have left unfilled.
AI is giving many SMBs a reason to rethink their next hire. Among businesses that have used AI, 26% took at least one of four actions affecting full-time staff because of the technology. The most common was skipping a hire they otherwise would have made, reported by 13% of AI users. Another 11% cut hours or a role, and 9.0% ended or did not renew an arrangement. Only 3.3% laid someone off because of AI, making skipped hires about four times as common as layoffs. That pattern lines up with the six in 10 users who say they can produce more without adding staff.
Zooming out, roughly three-quarters of SMBs using the technology didn’t scale back on human work in any of these four ways. Thus, for most AI users, the technology has not yet led to fewer hires, reduced hours or workforce cuts.
These actions are not limited to SMBs under financial pressure. Compared with flat-revenue AI users, those whose revenue grew were more likely to take each of the four actions. About one in six (16%) skipped a full-time hire, 56% more than flat-revenue SMBs (10%). Layoffs remained uncommon among both (4.0% of growing SMBs versus 2.2% of flat-revenue SMBs).
A deeper cut of the data shows which kinds of workers SMBs decided not to hire. Full-time employees were the most frequently impacted category, at 13%, followed by freelancers or contractors hired directly, at 12%. Roughly 10% each skipped a hire through an online freelance platform, a staffing agency or a professional services firm. Because businesses could select several categories, these rates describe overlapping choices. Overall, 25% of AI users decided against hiring in at least one of five categories.
AI Savings Come With Continued Demand for Human Work
The savings gained from using AI outweigh the revenue lost to customer use of the technology.
AI is a double-edged sword for SMBs. While they can use AI to avoid paying for outside help, they can also lose customers who use the technology in place of the services they sell. The survey asked businesses to estimate both their savings from using AI and revenue lost when customers used it instead of hiring them. Among the 508 SMBs that answered both questions, average estimated savings equaled 10% of annual revenue and losses equaled 4.7%. The resulting balance was positive by an amount equivalent to roughly 6.0% of revenue.
Frequent users reported the largest gains and the largest losses. Their average savings equaled 16% of revenue, compared with 9.7% among occasional users. Their estimated losses were also higher, at 6.7% versus 3.8%. Even after those losses, frequent users had the largest positive balance, equivalent to 9.0% of revenue. Businesses using AI rarely or never were close to breaking even, with estimated savings and losses each around 2.0%. Savings were also much more widespread among frequent users, with 88% reporting some savings compared with 26% of rare or never users.
These estimates put savings and displaced sales on a common scale, expressed relative to annual revenue. They use the midpoints of owners’ selected ranges rather than audited profit changes. The averages exclude “don’t know” answers and count never users as saving nothing, so the positive balance describes the reported experience across businesses rather than a gain every SMB has achieved.
AI can change where SMBs create value, not just how they work.
Customers’ AI use also creates demand for services. Nearly one-quarter of SMBs (23%) say they gained customers who specifically wanted a person doing the work. Another 14% gained work fixing AI-generated output. These are the two most common customer effects measured. Effects that take work away or pressure prices each reach fewer than one in 10 businesses. These include fewer inquiries from potential customers (9.1%), requests for lower prices (7.4%) and lost sales to competitors using AI (5.1%).
SMBs are more than four times as likely to report gaining customers who want a person than losing sales to a competitor that uses AI. That comparison measures how widespread each experience is, rather than the value of the work won or lost. It nevertheless points to opportunities for businesses serving customers who want human involvement or help fixing the technology’s output.
Some businesses are already responding to that preference. Twenty-one percent say they have emphasized the human touch in their marketing or that they plan to do so. Businesses can use AI internally while still having people handle customer-facing work. For SMBs, deciding where to use AI therefore also means considering which services customers want a person to deliver.
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Methodology
PYMNTS Intelligence gathered these findings for the latest edition of the SMB Growth Monitor by surveying 533 SMBs across the U.S. Fielded in August 2026, the survey examined SMBs’ use of AI, its financial impact and its effect on decisions about hiring staff and engaging outside workers. Results are weighted to reflect the broader U.S. SMB population, and all businesses included have a physical location.
