Small businesses that have adopted artificial intelligence tools are significantly more likely to expect they'll increase both employment and revenue over the next year compared to firms that haven't embraced the technology, according to a new survey from the Federal Reserve Bank of New York published October 8. The 2025 Small Business Credit Survey, which polled more than 5,000 employer firms between September and November 2025, found that the optimism gap persists even after controlling for firm characteristics, owner demographics, and past financial performance. The findings come as debate continues over whether AI will ultimately help or hurt employment across the economy.
Among firms with at least one employee, those currently using AI had a 33 percentage point net expectation of higher employment in the next twelve months, while non-users had only a 15 percentage point net expectation. The gap for revenue expectations was even wider: AI-using firms showed a 48 percentage point net expectation of revenue increases, compared to just 21 percentage points for non-users. Forty-six percent of surveyed firms with at least one employee reported that their business or employees were using AI tools, with another 15 percent planning to adopt them within the next year. Among AI users, 63 percent said AI was somewhat or very important to production, and 51 percent had integrated AI partially or fully into their business processes. However, only 31 percent of respondents reported actual increased sales from AI use, and 77 percent reported no change in current labor costs from the technology.
The report finds that even after accounting for firm and owner characteristics, AI users maintain a 13 percentage point advantage over non-users in expected employment growth. When the analysis also includes past employment changes, the gap remains positive at 10 percentage points. For revenue expectations, AI users retain a 14 percentage point advantage after controlling for firm characteristics, owner demographics, and past revenue changes. The association between AI adoption and positive expectations appears strongest among firms in weaker financial condition: among owners reporting fair or poor current financial health, the difference in net expected revenue growth between AI users and non-users reaches 24 percentage points, compared with just 15 percentage points for those reporting good conditions.
The researchers suggest that AI may be especially valuable for small firms tackling operational hurdles like hiring, marketing, and technology issues. According to the analysis, among AI users, those currently facing technology challenges have a 16 percentage point higher net expectation of revenue growth than those who don't report such difficulties. This pattern suggests AI may help firms overcome internal technological constraints that would otherwise cap growth. Unlike larger companies that build their own AI infrastructure, small businesses may lack staff capacity and technical expertise, but they're also less likely to face coordination challenges when integrating new tools. The authors note that the concurrent surge in national business startups alongside growing AI adoption hints these tools may be a positive force for smaller firms.
Whether AI-adopting small businesses will actually achieve the stronger revenue and employment outcomes they anticipate remains an open question that the report identifies as a subject for future research. The findings suggest the link between AI use and optimistic forecasts isn't simply a matter of naturally optimistic owners being more likely both to adopt AI and to expect growth—the association holds even when controlling for current financial condition and past performance. For now, the data indicates that AI adoption is associated with substantially more positive expectations about future growth, particularly among firms facing financial or technological constraints.