76% of small businesses are now exploring or using AI

A comprehensive survey of nearly 1,000 small businesses reveals that over 50% are actively exploring AI implementation, with 25% already integrating artificial intelligence into their daily operations. The findings from Reimagine Main Street, a project of Public Private Strategies Institute conducted in partnership with PayPal, indicate that AI adoption among small businesses has reached a critical tipping point, evolving from a question of “if” to “when.”

What you should know: Small businesses are moving beyond basic AI applications toward strategic implementations that provide competitive advantages.

• 82% believe adopting AI is essential to stay competitive in today’s business environment
• The survey identified three distinct segments: “Active Users” (25%), “Explorers” (51%), and “Non-Users” (24%)
• Together, Active Users and Explorers represent 76% of small businesses, indicating widespread momentum toward adoption

Key applications driving adoption: Current AI users are seeking sophisticated capabilities that move beyond simple efficiency gains.

• 77% report marketing and customer engagement as areas where new AI solutions would have the greatest impact
• 84% are willing to automate marketing content creation, while 59% would automate customer service inquiries
• 53% identify AI-powered cash flow forecasting as solving a “critical pain point”

The barriers holding back adoption: Despite enthusiasm, “Explorer” businesses face specific obstacles preventing full implementation.

• 38% worry about data privacy and security concerns
• 37% lack the time or resources to properly explore AI tools
• 34% don’t yet see a clear use case or return on investment
• 74% would adopt AI with clearer ROI evidence, while 73% want easier-to-use solutions

Why this matters: The shift represents a fundamental change in how small businesses view AI’s role in maintaining competitiveness.

• 66% believe “adopting AI is essential for staying competitive,” with 78% of current users feeling pressure to keep up with competitors
• 63% of current users believe AI could help their businesses become more resilient during economic challenges
• The technology is becoming viewed as a strategic necessity rather than a nice-to-have efficiency tool

What they’re saying: Business leaders emphasize AI’s transformative potential when properly implemented.

• “Small business owners are already putting AI to work,” said Tammy Halevy, Executive Director of Reimagine Main Street. “One in four are using it today, and more than half are exploring the possibilities of AI for their businesses.”
• “When it’s accessible, understandable, and built for real-life use, AI can be a great equalizer for small businesses,” explained Michelle Gill, General Manager of Small Business and Financial Services at PayPal.
• Katrina Golden, owner of Lil Mama’s Sweets and Treats, noted: “What used to take me hours now takes minutes, giving me back time to focus on growth strategies and customer relationships.”

The big picture: This survey demonstrates that AI adoption among small businesses isn’t facing resistance but rather varying stages of engagement on a clear trajectory toward widespread implementation, with most businesses now focused on how quickly and in what ways to integrate these technologies rather than whether to adopt them at all.