More Americans are starting one-person businesses and using AI instead of hiring

More Americans are starting businesses with no plan to hire, and AI tools are doing work that once took a finance, marketing or design team. In industries highly exposed to AI, applications for businesses unlikely to hire rose 26.8% from early 2024 to early 2026. That is from roughly 222,000 to 281,000 per quarter.

What the numbers show

Over the same period, applications in those industries with stronger signs of becoming employer businesses fell 6.4%. In construction and wholesale trade, used as a comparison group, the one-person-style applications dipped 0.4%.

George Mason University economist Liya Palagashvili urges caution. The findings are preliminary and do not prove AI caused the rise. The measure also cannot show whether these businesses stayed one-person firms or never hired.

What it looks like in practice

Alex Willen runs 12 e-commerce brands with no employees and expects $2.5 million to $3 million in revenue this year. He uses Anthropic's Claude for bookkeeping, customer service, advertising and inventory. OpenAI image tools handle work that once went to photographers and designers.

• A traditional product photo shoot can cost $2,000 to $5,000, Willen said.
• A designer for new listing images can cost $300 to $1,000.
• He says money not spent on those jobs goes into his pocket.

Kristin Ginn left Microsoft in March and started an AI-adoption consultancy. Seven months later, she has roughly $250,000 in business received or contracted through year-end, with no employees or regular contractors. She spends less than $60 a month on paid AI tools.

The other side of the story

Among existing small businesses, the picture is different. Payroll software company Gusto found that firms that adopted AI had about 7% higher headcount after a year than similar firms that knew about AI but did not adopt it. For firms with fewer than 10 employees, the gap was about 10%.

Going lean also does not mean going independent. About 80% of Willen's revenue still comes through Amazon. Ginn says LinkedIn is one of her biggest sources of customers. Stanford economist Erik Brynjolfsson says big platforms may grow more powerful because they bring many small sellers together.

What to take from it

A FreshBooks survey found 79% of solopreneurs tried AI before hiring someone for a task they could not do themselves. For anyone planning a small business, AI may cover some jobs you would have paid for. The research is early, and it does not show that hiring is going away.