The Federal Reserve Bank of New York published new data this morning, and the headline number is worth pausing on: small business owners who use AI are more than twice as optimistic about hiring as those who don’t. That’s not a tech blog’s take. That’s 5,248 employer firms tracked by the Fed’s 2025 Small Business Credit Survey (SBCS), published today by Liberty Street Economics.
Researchers Will Aarons and Asani Sarkar found that firms currently using AI had a 33-point net expectation of higher employment over the next twelve months. Non-users? Just 15 points. On revenue, the gap is even wider: AI users were at +48 points in net expected revenue growth. Non-users sat at +21 points. The difference holds up even after controlling for age, profitability, firm size, and past performance.
What This Actually Means
Here’s the thing most coverage of AI and small business gets wrong: the story isn’t about replacing workers, it’s about who is more bullish on the future. The firms using AI right now aren’t cutting headcount. They’re planning to grow it.
The NY Fed data shows 77% of AI-using small businesses reported no change in labor costs from their AI adoption. That cuts against the automation-panic narrative. The real split isn’t “AI users vs. everyone else on payroll.” It’s “AI users vs. non-users on confidence.” And confidence, in small business, usually predicts action.
There’s a counterintuitive finding buried in the data worth highlighting: the optimism gap was largest among business owners reporting fair or poor current financial conditions. AI users in that struggling cohort showed a 21-point higher net expectation of employment growth than their non-AI peers. That means AI isn’t just a tool for thriving businesses. It’s showing up most powerfully among owners who need it most and are leaning in anyway.
The Numbers Behind It
- 46% of employer firms reported using AI tools in the 2025 SBCS
- 15% more said they planned to adopt AI in the next twelve months
- 63% of AI users said AI was “somewhat or very important” to production
- 51% had integrated AI partially or fully into their business processes
- Only 31% said AI had already increased their sales — yet their forward expectations are dramatically higher than non-users
- The employment optimism gap persists at 10 percentage points even after controlling for past hiring changes
The “only 31% see sales lift” number is the most important one on this list. It tells you that most of the optimism isn’t coming from proven revenue results. It’s coming from process confidence: owners who’ve integrated AI into how they work believe it’s going to pay off, even when it hasn’t shown up on the income statement yet. That’s either a leading indicator or a collective delusion. The Fed’s data suggests the former.
The Hustler’s Library Take
There’s a version of this story that says “great, AI makes small businesses optimistic.” Shrug. But here’s what the data is actually showing: a confidence premium is forming around AI adoption, and it compounds. Owners who believe AI will help them grow are more likely to hire, invest, and take risks. That activity creates the results they expected. The non-adopters? They’re not pessimists because AI failed them. They’re pessimists because they never gave it a chance to change their operating model.
This is also a corrective to the banks-are-using-AI-against-you narrative that’s floated around lately. When small businesses adopt AI on their own terms, the expectation shift is real and significant. The Fed isn’t tracking unicorns here. These are employer firms with at least one person on payroll, surveyed across industries and regions. The optimism gap is broad, not niche.
One more angle worth noting: the firms reporting AI as “fully integrated” weren’t meaningfully more optimistic about hiring than firms still experimenting with it. That suggests the confidence boost kicks in early in the adoption curve, not just after deep implementation. You don’t need to overhaul your entire stack to start thinking differently about growth.
What You Should Do
1. Take the optimism gap seriously as a competitive signal. Your competitors who are using AI aren’t just more productive today. They’re planning to hire more aggressively and invest more in growth over the next twelve months. The Fed’s data suggests that divergence will only widen. If you’re in the 54% who aren’t using AI yet, the window to close that gap is now, not after Q4.
2. Don’t wait for the sales lift to start.* The Fed found that only 31% of AI users had seen a measurable sales increase — but their expectations were more than double those of non-users. The payoff is first showing up in clarity and process, not revenue. Start with one repetitive workflow (customer follow-up, proposal drafts, content, bookkeeping summaries) and let the time savings show you where to go next. See what OpenAI’s free small business training covers — that’s a zero-cost entry point.
3. If your business is struggling, this data matters most to you. The survey found the optimism gap was 21 points among owners in “fair or poor” financial condition — larger than the gap for thriving firms. If you’re behind, AI isn’t a luxury upgrade. It’s a lever that struggling owners are using to outpace other struggling owners. Building your own lightweight AI workflows doesn’t require a big tech budget. It requires 30 minutes and a willingness to try.
The NY Fed’s full survey report is available at fedsmallbusiness.org.
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