Gen AI Is Boosting Small Businesses

Microbusinesses are reaping sizable gains from generative AI.

It’s not exactly a state secret that large companies are using AI, but surprisingly, 99% of Fortune 500 companies are already using artificial intelligence, with customer service and data analysis being the most common company departments to deploy the technology.

Now, the big boys need to move over and make room for the smallest companies, which are turning to AI for increased productivity and cost savings.

That’s the takeaway from a new GoDaddy study that shows 50% of microbusiness owners and operators recently surveyed indicating they have tried Gen AI tools in the past few months. (A sub-category of small business, microbusinesses are companies comprised of less than ten people who usually earn $250,000 or less in revenues yearly.) The study, produced by GoDaddy’s Venture Forward research arm, showed 44% of microbusinesses agree that GenAI helps them “compete” with big businesses.

“Generative AI is already showing early potential to help level the playing field for small businesses as they go up against larger and often better-resourced competitors,” said Alexandra Rosen, senior director of GoDaddy’s Venture Forward. “We’re seeing the most ambitious ones embrace it the fastest.”

Three Big Takeaways From the Study

(1) Microbusiness owners aged 18-35) and black microbusiness owners are 50% more likely to have used GenAI for their business in the last several months than their white counterparts. “About one in three Black and Hispanic-owned micro businesses use GenAI for business while only one out of every four white- and Asian-owned micro businesses use GenAI for business,” the study reported.

(2) GenAI is most widely used by micro businesses for content creation. “However, Black-owned microbusinesses are almost twice as likely as white-owned microbusinesses to use it for customer service,” Go Daddy noted.

(3) Gen AI users have a more positive outlook about their business (81%) and the national economy (40%) than smaller businesses who haven’t used the technology. “This is true for those who have used Gen AI for business,” the study noted. “Those who haven’t used GenAI tend to have a more negative outlook about both their business (72%) and national economy (36%).”

Like their larger counterparts, small companies are leaning into AI for competitive reasons, but also see the same technology limitations.

“Microbusiness owners use Gen AI to level the playing field to better compete with large companies,” the study concluded. “While the majority of microbusiness Gen AI users experienced a positive impact, the top hesitation is not being familiar with Gen AI.”

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