While tech giants spend hundreds of billions of dollars to scale artificial intelligence, the smallest companies in the U.S. economy are utilizing a few AI tools to build cost-competitive business models. According to US Top News and Analysis (cnbc.com), this shift is allowing new business owners to operate without employees while achieving strong financial starts.
Rise of the Solopreneur
Alex Willen operates 12 e-commerce brands with zero employees and expects to generate between $2.5 million and $3 million this year. Similarly, Kristin Ginn left Microsoft in March to start trnsfrmAItn, an AI-adoption consultancy, securing roughly $250,000 in business received or contracted through year-end within seven months, also without staff or regular contractors.
Stanford economist Erik Brynjolfsson stated that the biggest misconception is that AI is only about individual productivity, noting it is actually about leveraging AI to perform tasks that previously required entire teams. Early research on solopreneurs bears watching, according to Liya Palagashvili, a labor economist and director of the Labor Policy Project at George Mason University’s Mercatus Center. Palagashvili found that new business formation is rising in direct correlation to applications unlikely to become employer firms.
In industries heavily exposed to AI, business applications without early signs of hiring increased by 26.8% from the first quarter of 2024 through the first quarter of 2026, rising from about 222,000 to 281,000 per quarter. Meanwhile, applications in those same industries with stronger indications of eventually becoming employer businesses fell 6.4%. In construction and wholesale trade, used as a comparison group, non-employer applications declined 0.4%.
Palagashvili explained that AI gives those capabilities directly into the hands of the individual. However, she cautioned that the findings are preliminary and descriptive, and do not establish that AI caused the increase. The Census-based measure identifies applications lacking near-term payroll or hiring plan indicators, but does not confirm whether those businesses ultimately remained one-person firms.
Willen illustrates how these economics function in practice. Utilizing Anthropic’s Claude, he manages bookkeeping, customer service, advertising, and inventory, while OpenAI image tools handle photography and design work. Without AI, Willen stated he would likely need another full-time employee and external contractors, noting that traditional product photography shoots and designers can cost thousands of dollars. When AI eliminates those expenses, that money goes directly into his pocket.
AI also enables Willen to pursue new revenue channels. After acquiring Lone Trail, a hunting-gear brand where the Shopify site accounted for roughly 1% of sales, he used ChatGPT and Claude to rebuild the site and run Meta advertising. Within a recent 30-day period, Shopify accounted for about 30% of Lone Trail’s revenue, creating at least six figures of annual revenue that would not have existed without AI.
Ginn uses AI to assist with proposals, pricing, and strategy, and is exploring an AI agent for client processes. A survey by FreshBooks showed that 79% of solopreneurs tried AI before hiring someone for a task they could not perform themselves, rising to 86% among microbusiness owners. FreshBooks CEO Shaheen Javadizadeh noted that AI allows them to look much bigger than they are.
Conversely, data for existing small businesses paints a different picture. Gusto, a payroll and HR software company, found that small businesses adopting AI had headcounts about 7% higher after a year compared to non-adopters, with firms under 10 employees growing headcounts about 10% more.
Platform Reliance and Industry Shifts
Operating with fewer people does not eliminate reliance on major technology platforms. Roughly 80% of Willen’s revenue comes through Amazon, alongside Meta and Shopify, while Ginn noted LinkedIn has been one of the biggest drivers of customers to her consultancy. Brynjolfsson noted that the proliferation of smaller producers can increase the value of platforms that connect them with buyers, making big platforms like Amazon more powerful than ever.
The financial relationship is not uniform. While Willen turns some savings into profit, Ginn spends under $60 a month on paid AI tools. Brynjolfsson added that as core business production becomes cheaper, small businesses focus more on customer acquisition and distribution.
Brynjolfsson also believes AI will lead to the creation of larger firms on average. In a September research report titled “AI’s Use of Knowledge in Society,” co-authored with Zoë Hitzig of the Anthropic Institute, the researchers argue that as AI codifies scattered knowledge and enables centralized action, firms will grow larger, industry concentration will increase, and local managerial autonomy will decline.
Brynjolfsson predicts this trend could hollow out midsize firms, leaving very small teams at one end and giant organizations exploiting AI and scale at the other, while layers of management focused on internal coordination are significantly reduced.
Adam Branch experienced a similar shift. Before founding rhino.ai, an enterprise software company modernizing legacy systems with AI, Branch built Incentive Technology Group, a traditional technology services company that grew to roughly 500 employees. Branch stated that winning more work previously meant hiring more people, whereas rhino.ai has about 50 employees and achieves three to four times the productivity per employee. He estimates labor dropped from 85% of operating spending at ITG to about 40% at rhino.ai, while technology rose from 5% to roughly 25%.
AWS observed similar trends among AI-native startups. Its Engines of Growth research study of 3,413 startup founders and senior leaders across 20 countries found these companies grew revenue an average of 156% annually compared to 65% for startups overall, with over half generating more than $400,000 in revenue per employee. Ruba Borno, vice president of AWS Specialists and Partners, stated that founders can now scale with technology rather than just headcount.
Ultimately, Brynjolfsson views the AI shift as a triple win. Platforms and tool creators win by selling technology, solopreneurs win by using it, and consumers win by receiving new products, creating a larger economic pie overall.
“Whenever there’s a technology change, a platform change, obviously it benefits the companies that are creating those platforms and technologies,” Brynjolfsson said.
