Only 24% of small businesses are using AI tools like ChatGPT says survey

A new survey from the National Federation of Independent Business reveals that only 24% of small business owners are currently using AI tools like ChatGPT, Canva, and Copilot in their operations. The data highlights a significant adoption gap, with smaller firms lagging behind larger competitors, though early adopters report that AI is enhancing productivity without displacing workers.

What you should know: Small business AI adoption varies dramatically by company size, with the smallest firms showing the lowest implementation rates.

• Companies with single-digit employee counts have just 21% AI adoption, while firms with 50 or more workers reach nearly 50% implementation.
• Notably, 98% of small businesses using AI report that the technology hasn’t impacted their employee headcount.

The big picture: Small businesses see AI as increasingly important for future competitiveness, even if current adoption remains limited.

• 63% of surveyed employers believe AI utilization will be important in their industry over the next five years, with 12% calling it “extremely important.”
• Common AI applications include communications, marketing and advertising, predictive analysis, and customer service.

Real-world example: Dallas-based law firm Lynn Pinker Hurst & Schwegmann demonstrates creative AI implementation that’s transforming legal work.

• Partner Chris Schwegmann uses Harvey, a legal technology platform, to channel different perspectives, asking AI to assume the role of Supreme Court Chief Justice John Roberts or fictional detective Sherlock Holmes when analyzing cases.
• “Harvey, ChatGPT … they know who those folks are, and can approach the problem from that mindset,” Schwegmann explained.

Why this matters: AI is enabling smaller firms to compete more effectively against larger competitors by automating routine tasks and accelerating complex work.

• At Schwegmann’s 50-attorney firm, AI resolves work in days that previously took weeks, freeing associates from “grunt work” and giving senior partners more time to mentor younger attorneys.
• “No longer does a party have an advantage because they can paper you to death,” Schwegmann noted, explaining how AI helps level the playing field in legal proceedings.

What they’re saying: Legal professionals emphasize that AI augments rather than replaces human judgment and creativity.

• “We still have the need for the independent legal judgment of our associate lawyers and our partners — it hasn’t replaced them, it just augments their thinking,” Schwegmann said.
• “It makes them more creative and frees their time to do what lawyers do best, which is strategic thought and creative problem solving.”

Supporting data: The NFIB findings align with other recent research on small business AI adoption.

• A separate survey from Reimagine Main Street, a project of Public Private Strategies Institute in partnership with PayPal, found similar results among nearly 1,000 small businesses with annual revenue between $25,000 and $50,000.
• The NFIB report suggests that “with a little attention from all the relevant stakeholders, a more equal playing field is possible” for smaller businesses to catch up with AI implementation.