Small Businesses Aren’t Using AI Like You Think — Here’s The Reality

Based on my company and my clients, I can attest that small businesses are definitely not substantively using AI in 2024

(This column originally appeared in Forbes)

According to a new study from the U.S. Chamber of Commerce, nearly every small business — 98 percent of us! — said they are “utilizing a tool that is enabled by AI” and of these tools 40 percent said they were “using generative AI tools like chatbots and image creation.” When one reads those numbers you immediately think wow! Small businesses are really leaning into AI, right?

Wrong.

There are more than 30 million small businesses in the U.S. and I’m sure there are more than a few intrepid entrepreneurs that are leaning into AI apps and tools and platforms to help them run their businesses. They are pioneers. They’re probably solopreneurs or run very small companies, where there’s low risk if something doesn’t work or “hallucinates” (which is another word for AI not working.) They’re geeks and gamists and enjoy monkeying around with technology.

But most small business owners aren’t like this. They run pizza shops and gas stations. They lay bricks and put up drywall. They sell parts to other businesses and provide professional services. 7 million of us have employees and have been around the block for a while. We know not to trust anything new from Silicon Valley until there’s been enough time for testing.

Based on my company and my clients, I can attest that small businesses are definitely not substantively using AI in 2024. But that doesn’t mean we’re not intrigued. We are. For us, AI is a way to keep overhead low and get more productivity from our existing employees. We know AI will substantially change the way we operate our back office. We can see how AI will leverage new machines — robots, drones, headsets — that will make us much more efficient and profitable. But not yet.

Ask any business owner and they’ll tell you that “utilizing a tool that is enabled by AI” likely means the odd query using ChatGPT, Gemini, Anthropic or another chatbot. These platforms oftentimes provide good but not perfect responses and still cannot be relied upon. We understand the potential. But no one’s taking them seriously so far.

A few unfortunate souls have been tinkering with Microsoft Copilot or Google Gemini in their office systems. Spoiler alert: neither work very well at the moment. They lock up. They spin and spin with no results. They provide wrong or inaccurate answers. They sometimes disappear and then mysteriously reappear on our screens. But, like the chatbots, we also understand the potential of these tools. They will obviously grow better in the future.

In 2024, small business AI utilization is mostly allowing a smattering of employees to try out a few apps to pretty up their profile photo, review a contract or transcribe an online meeting. Sure, technically this means “utilizing a tool that is enabled by AI.” But in reality it’s more like playing with toys that use a little bit of AI. We’re certainly not relying on this stuff for our core operations.

And can you blame us? Most small business owners — myself and my clients — would never trust AI to automate our internal processes. That’s because few of us actually have processes! And even if we do we know that using AI would be a disaster considering that our databases which would drive any automation are typically inaccurate, incomplete and unreliable. My clients are also very concerned with the privacy and security of their data. We’re not sure we trust Sam Altman or Mark Zuckerberg when we use their cloud-based AI offerings or that legislation passed by politicians that barely know how to plugin their TV sets is going to truly offer us protection.

In 2024 — and definitely in 2025 — the real AI game is with large companies, not small businesses. Big companies like Klarna, Taco Bell, Walmart and many others are spending millions of dollars licensing large language models from OpenAI, Google, Mistral and others. They’re creating custom, internal AI-driven applications to perform autonomous customer service chats, listen in on employees’ conversations, generate countless investment scenarios, talk to customers on the phone and replacing shop assistants with virtual assistants. This is how AI is being used right now.

So don’t believe the hype. Small businesses aren’t really using AI…yet. But as infrastructure builds, developers get more experience and large language models proliferate we know that the software companies that provide the technologies that underpin our core operations — accounting, CRM, inventory management, HR — will be rolling out lots of AI functionality for us to enjoy. This will happen in the next few years. And small businesses will adopt. But for now, we’re just playing.