New data reveals that the number of Americans starting businesses is continuing to rise, with artificial intelligence helping entrepreneurs launch ventures with fewer employees and leaner operating models.
Business applications in the US increased by around 15% year-on-year as of June, according to a report from the Bank of America Institute. However, the number of new businesses planning to hire workers has declined, highlighting a growing gap between business formation and job creation.
The findings suggest that AI and other digital tools are making it easier for founders to manage more aspects of running a business themselves. Entrepreneurs can use technology to automate administrative tasks, bookkeeping and content creation, reducing the need to recruit employees during the early stages of a business.
Researchers at the Bank of America Institute said these tools could help explain why applications to start businesses are increasing while the number of businesses planning to pay wages is falling.
The trend is also being driven by the growth of one-person businesses, with entrepreneurs increasingly using AI to support operations that would previously have required additional staff.
A Nasdaq analysis of US Census Bureau data found that applications from businesses intending to operate with one person had increased by 20% since early 2025. Applications from businesses likely to hire employees, meanwhile, remained broadly flat.
Michael Normyle, an economist at Nasdaq, said the acceleration in business formation had come almost entirely from one-person companies.
This shift could have implications for the wider economy, particularly the number of jobs created by new businesses. While rising entrepreneurship can support innovation and economic activity, fewer founders hiring employees could limit the immediate employment benefits associated with business growth.
The availability of AI tools is helping entrepreneurs establish businesses with fewer upfront resources, potentially lowering some of the barriers to starting a company. Founders can use technology to support day-to-day operations while concentrating on developing products, attracting customers and generating revenue.
However, it remains unclear whether businesses that initially operate without employees will go on to recruit as they grow. Some may continue using technology to maintain lean operations, while others could expand their teams as demand increases.
Separate research from the Bank of America Institute examining small business activity found that many businesses were increasing their spending on technology. However, researchers reported limited evidence that AI was replacing jobs on a wider scale over the longer term.
The findings suggest that AI is currently playing a role in helping more people establish businesses, although its impact on productivity and employment is still developing.
For entrepreneurs, the technology offers opportunities to manage a broader range of business activities without immediately committing to the costs associated with hiring. This could make it easier for individuals to test business ideas, establish operations and build a customer base before expanding.
For the wider economy, the challenge will be understanding how this new generation of businesses develops and whether the increase in entrepreneurship eventually translates into more employment opportunities.
The Bank of America Institute said the available evidence points towards AI making it easier to start a business, while its contribution to broader productivity improvements among small businesses remains less certain.
