America's newest small business owners with no employees are off to a hot start in AI era
New small business formation is rising for owners who can grow with AI serving in finance, marketing and design roles, eliminating the need for hiring.
Key points
- Alex Willen runs 12 e-commerce brands with no employees and expects $2.5 million to $3 million in revenue this year.
- In AI-exposed industries, business applications without early hiring signs rose 26.8% from early 2024 to early 2026.
- Stanford economist Erik Brynjolfsson predicts AI could hollow out midsize firms, leaving very small teams and giant organizations.
Small US businesses run by owners with no employees are growing quickly with the help of artificial intelligence, according to a CNBC report. Alex Willen, who operates 12 e-commerce brands without staff, expects revenue of $2.5 million to $3 million this year. Kristin Ginn left Microsoft in March and started an AI-adoption consultancy called trnsfrmAItn; seven months later she has roughly $250,000 in business received or contracted through year-end, with no employees or regular contractors.
Research from George Mason University's Mercatus Center suggests the trend is broader. Liya Palagashvili, a labor economist and director of the Labor Policy Project there, found that in industries highly exposed to AI, business applications without early signs of hiring rose 26.8% from the first quarter of 2024 through the first quarter of 2026, from about 222,000 to 281,000 per quarter. Applications in those industries with stronger signs of becoming employer businesses fell 6.4% over the same period.
How the owners use AI
Willen uses Anthropic's Claude for bookkeeping, customer service, advertising and inventory, and OpenAI image tools for work once done by photographers and designers. He said that without AI he would probably need one other full-time person plus contractors for photography, design, bookkeeping and ad management. After acquiring the hunting-gear brand Lone Trail, he rebuilt its Shopify site with ChatGPT and Claude; Shopify went from about 1% of sales to roughly 30% in a recent 30-day period.
Ginn uses AI for proposals, pricing and strategy and is exploring an AI agent for part of a labor-intensive client process. A FreshBooks survey found 79% of solopreneurs had tried AI before hiring someone for a task they could not do themselves. FreshBooks CEO Shaheen Javadizadeh said AI lets them "look much bigger than they are."
The biggest misconception is that it's just about individual productivity; it's actually about leveraging AI to perform tasks that previously required a whole team
— Stanford economist Erik Brynjolfsson
Caveats and a shifting landscape
Palagashvili cautioned that the findings are preliminary and descriptive and do not establish that AI caused the increase. The measure does not show whether those businesses stayed one-person firms or never hired. Gusto, a payroll and HR software company, found that small businesses adopting AI had headcount about 7% higher after a year than comparable non-adopters.
Brynjolfsson and researcher Zoë Hitzig argue in a September report that as AI codifies knowledge, firms will grow larger on average. Brynjolfsson predicted AI could contribute to a "hollowing out" of midsize firms, with very small teams at one end and giant organizations at the other. He described the outcome as "a win-win-win — a triple win."
