The Federal Reserve Bank of San Francisco dropped a new research brief this week that every small business owner should read. Based on data from the 2024 Small Business Credit Survey, the report reveals that nearly 40% of small businesses are already using or actively planning to adopt artificial intelligence — and the gap between those who act on that and those who don’t is only going to widen from here.
The brief, titled “AI Adoption Among Small Businesses: Qualitative Insights from the Small Business Credit Survey”, was authored by Rocio Sanchez-Moyano, Natalie Holmes, and Sarah Simms and published in July 2026. It’s not a think piece. It’s primary data from one of the most credible economic institutions in the country.
What This Actually Means
The Fed survey found that small businesses using AI aren’t just doing one thing with it. They’re deploying it across a wide range of real work: productivity tasks, marketing and SEO, written communications, graphic design and visuals, customer service, analytics and forecasting, and even programming machines and sensors. This isn’t ChatGPT answering one email. It’s AI replacing entire categories of labor costs.
The sophistication varied a lot. Some businesses used basic task assistance. Others built fully integrated custom AI systems specific to their workflow. But the common thread was this: the businesses that had moved past “considering AI” and into “using AI” were doing real, measurable work with it. If you’re still on the sideline wondering whether to try it, these are your competitors now.
The report also captured why many businesses haven’t adopted yet. The barriers cited most often: regulatory uncertainty, the upfront cost of appropriate tools, time and capacity to train staff, and knowledge gaps around implementation. Those are real obstacles — but they’re also exactly the kind of obstacles that can be worked through systematically. They’re not reasons to wait indefinitely.
If you want a plain-English starting point, the Beginner’s Guide to ChatGPT for Business Owners on HL walks through the basics without the jargon. And if you’re ready to go deeper, The Complete Guide to AI for Small Business covers the strategic layer.
The Numbers Behind It
According to the Federal Reserve Bank of San Francisco, nearly 40% of small business respondents to the 2024 SBCS reported using or planning to use AI. That number is moving fast.
Put that in context: McKinsey research from 2025 found that only about 35% of small businesses had meaningfully adopted AI as of that year. The Fed data suggests that in the year since, the adoption curve is accelerating. The gap between early movers and late adopters is compressing, but it won’t compress forever.
And there are 33.2 million small businesses in the United States, according to the SBA. Even at a 40% adoption rate, that leaves roughly 20 million businesses that haven’t yet touched AI in any meaningful way. The opportunity for owners who get ahead of this: significant competitive advantage, lower operating costs, and the ability to do more with lean teams.
One more number worth noting: the Federal Reserve’s own 2025 Small Business Credit Survey found that 43% of small business owners work more than 60 hours per week. That’s the environment in which AI isn’t a luxury. It’s a labor solution.
The Hustler’s Library Take
Here’s the thing about a Federal Reserve research brief: it doesn’t get published until the trend is already real. By the time the Fed is writing about AI adoption in small businesses, the early adopters have had 18 months of compounding advantage. You’re not getting ahead of this by reading a Fed brief. You’re confirming what’s already happening.
That means the question isn’t whether to adopt AI. It’s whether you’re going to do it in the next 90 days or wait another year while your margins get squeezed. The businesses in this survey using AI for marketing, customer service, and operations aren’t doing anything exotic. They’re using tools that are already available to you, right now, at reasonable cost.
Stop treating AI like a trend to monitor. Treat it like an employee you haven’t hired yet.
If you’re not sure where to start, OpenAI just launched a dedicated program specifically for small business owners that breaks down exactly how to get ChatGPT working inside your business. And if you want to understand how AI fits into a broader efficiency strategy, read through the guide on improving operational efficiency in your small business.
What You Should Do
1. Audit where you’re losing time to repetitive tasks this week. The Fed report specifically calls out productivity tasks, written communications, and marketing as the most common AI applications. If you’re spending hours on any of those, that’s your entry point. Pick one and test a tool against it before Friday.
2. Address the barriers directly, not hypothetically. The report identified four specific blockers: regulatory uncertainty, cost, training time, and knowledge gaps. Write down which of those actually applies to your business right now. Then solve for that one thing. If it’s cost, look at what’s free or low-cost. If it’s knowledge, start with the automation guide or sign up for OpenAI’s small business webinar series.
3. Set a 30-day AI pilot in one department. Customer service is the easiest place to start for most businesses. Tools that handle initial inquiries, follow-ups, or FAQs can reduce your load immediately. The guide on using chatbots to automate customer service walks through how to set this up without technical expertise.
The data is in. The Fed has confirmed it. The only variable now is timing — and every month you wait is a month your competitors are gaining ground.
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