How AI will change American entrepreneurship and small businesses

Travis Di Lombardi-Spicer was denied a raise in January 2025 and quit his audio production job on the spot. The 30-year-old felt that artificial intelligence could eventually eliminate his job, so he says he had saved about $75,000 a year from full-time jobs and freelance projects and wanted to do something proactive instead of waiting for the end to come.

Skeptical of finding stability in an uncertain job market, Spicer turned to entrepreneurship. He sold some of his personal assets and withdrew money from his 401(k) and savings to spend $40,000 to launch the beta version of Spotbookr, an AI-powered consumer spending and advertising analytics business, in May 2025, he says.

U.S. entrepreneurs filed 1.56 million business applications between November and January, the most in any three-month period since at least 2004, according to a CNBC Make It analysis of U.S. Census Bureau data. This increase is somewhat predictable, as people are more likely to start a business when they are struggling to find work, especially in the context of a stagnant job market or mass layoffs.

This group of entrepreneurs is different. Anticipating future layoffs, some Americans are proactively quitting their jobs to start their own businesses. Many of them say that AI will make it easier to launch a startup. Some people are voluntarily retiring before suffering from AI-related layoffs. Spicer has been an example of both since experimenting with the technology himself, he said.

“Budgets[for audio projects]kept getting smaller and smaller,” Spicer said. “I just wanted control.”

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Entrepreneurship is notoriously risky. According to data from the Bureau of Labor Statistics, about a quarter of new businesses in the United States do not survive their first year. But workers are also wary of risks threatening their typical 9-to-5 roles, with reports on the future of work and big-name CEOs predicting widespread workforce changes.

In a December Resume Now poll of 1,012 employed Americans, four in 10 workers said AI has already “replaced, devalued, or duplicated” aspects of their jobs, and 29% said they could effectively perform at least half of their daily responsibilities.

Add in geopolitical instability, rising costs of living, and declining trust between employers and employees, and working Americans face a perfect storm of unpredictability, says Saikat Chaudhry, faculty director of the Entrepreneurship Hub at the University of California, Berkeley’s Haas School of Business. As a result, record numbers of Americans are seeking greater control over their careers, income and time, he says.

“The opportunity cost[of starting a business]is lower now simply because the alternatives in the labor market are not as strong,” Chaudhuri said.

Five years into Michelle Yong’s software engineering career at a major national media outlet, she says she felt unfulfilled and unhappy. She was making good money at $250,000 a year, including bonuses, but she says the more advanced AI became, the more she could see it eventually replacing her. She added that she felt aimless.

“I wasn’t pushing myself very hard, and I wasn’t satisfied with my progress or accomplishments,” says Yeung, 29. She points out that her job dissatisfaction involves factors other than AI. Still, “I wanted to go from giving 20% ​​of myself to giving 200% to something,” she says.

Yong quit her job in early 2025 and used her savings to open Matcha House, a cafe in New York’s East Village in July of the same year. “I love the physical experience of making something and giving it to someone (and) building a relationship with a customer,” she says.

Yong and Spicer say they have not yet received salaries from the new business. Instead, they say, they have sacrificed their livelihoods. Spicer’s girlfriend paid the couple’s living expenses, and Yong moved into a cheaper apartment with a new roommate to cut costs.

Both say they now prefer the uncertainty of entrepreneurship to their previous roles. He said headlines about companies like Amazon, Salesforce and Block that cited AI while cumulatively laying off tens of thousands of employees over the past year partially drove Spicer’s decision to leave his previous career behind.

Corporate employment is less stable than it used to be, encouraging some people to start their own businesses, said Todd McCracken, president and CEO of the National Small Business Association, an advocacy group. The U.S. added 116,000 jobs in 2025, down from 1.46 million in 2024. Layoffs announced in January were the highest monthly level since 2009, according to data from global outplacement firm Challenger, Gray & Christmas.

“In terms of national culture, I think we’re seeing a shift away from large, bureaucratic organizations toward entrepreneurship and start-up culture,” McCracken said.

While AI could threaten job security for some workers, it could also help aspiring entrepreneurs get started, Chaudhuri said.

The technology requires no prior expertise and can help create a basic website or business plan, he says. In some situations, it can handle basic, basic tasks (often administrative tasks) that founders would otherwise have to spend extra time doing themselves or pay someone to do.

Shahezad Contractor is the founder and CEO of Cousins ​​Food, a Philadelphia-based halal restaurant group that generated more than $4 million in total revenue in 2025, according to documents reviewed by CNBC Make It. He says he regularly uses AI tools, especially LLMs like Claude, to generate ideas for social media content, create training materials for employees, and write marketing copy.

“Previously, I might have hired a content writer” to do some of these tasks, says the 44-year-old contractor, but thanks to AI, he was able to “fill in the gaps” in his skillset and do them himself. He says he’s even using AI to explore new locations for his restaurant group (which currently includes a pizza and hoagie joint, a barbecue restaurant, and eight burger joints) and create financial projections for existing restaurants.

The contractor previously worked in the IT field for 24 years. He says the rise of AI in the tech industry influenced his decision to leave his previous career behind and pursue entrepreneurship in 2024.

Benjamin Jones, a professor of entrepreneurship and strategy at Northwestern University’s Kellogg School of Management, says while AI may help some small business owners, it doesn’t necessarily guarantee long-term success. He points out that the increase in startups leads to increased competition, even for established companies.

Chaudhuri echoed similar sentiments. “More startups have been created in the last 20 years than ever before, but at the same time the stock market is more concentrated than ever before.”

But entrepreneurship requires risk and failure, Jones said. “It’s hard to know what will work until you try it,” he says. “That’s the essence of adventure” when starting a new business.

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