We spoke to the experts: How could AI affect small businesses?

Companies like Meta and Google recently made waves by going all-in on artificial intelligence — but it’s not just billion-dollar companies thinking about how to use AI in their work. Small business owners, too, are learning how to use AI for everything from creating customized customer service to building a brand on social media.

As AI continues to grow, there will be even more opportunities for small business owners to take advantage of this rapidly evolving technology. Bankrate spoke with experts in communications, technology and business to better understand how AI will affect the future of small businesses. They shared how AI makes it easier to start a small business and which industries will be affected by AI — for better and for worse.

These interviews have been edited for length and clarity.

How will the rise of AI make it easier or harder to start a small business?

AI is making it significantly easier to start a small business by reducing barriers to come to market. Entrepreneurs can now use AI tools in a variety of fields including, but not limited to, marketing and research, business planning, automation and even content creation. AI-powered analytics can help new business owners identify market gaps, analyze competitors and predict customer trends. AI chatbots, virtual assistants and automated customer service reduce the need for large teams, allowing solopreneurs (solo entrepreneurs) to scale efficiently. Platforms like ChatGPT, Claude and Gemini can generate ad copy, social media content and even automate email marketing, saving time and reducing the amount of resources required. 

However, as AI lowers the barrier to entry, competition could increase, making differentiation and brand-building even more critical.

— Jeremy Rambarran, adjunct professor, Touro University Graduate School of Technology

Honestly, AI is making it far easier to start a small business. It’s reducing costs and automating many complex tasks. Entrepreneurs can use AI-powered tools to conduct market research (which traditionally takes a long time), write business plans, manage customer service and even handle financial forecasting — all tasks that previously required hiring expensive experts or investing significant learning time. 

I will say, however, that while AI offers incredible advantages, it also presents serious challenges. Business owners must stay up to date on AI advancements and be mindful of ethical concerns like data privacy, misinformation and potential over-reliance on automated systems.

— Albert Orbinati, Ph.D., department chair of business and associate professor of business administration, Champlain College Online

AI is fantastic at assisting in basic business operations that enable a startup — tasks like creating legal documents, brainstorming new ideas and testing product features are far more accessible than ever in the past. AI has also been shown to partially substitute for missing roles by training an AI agent to act as a professional in that role.

(Also), the general ease of access to AI tools allows many more people to launch new businesses in the tech space. We’ve moved forward from a world where only a handful of people in the world could teach or train machines in the times of Alan Turing to one where anyone with the ability to read and write can teach their own personal machines.

— Josh Kaisen, Ph.D., post-doctoral fellow and managing director of the Human-Centered Artificial Intelligence Institute, University of Houston

AI tools will help small businesses streamline copywriting, content creation and many other day-to-day activities, which is great and will save them time. However, it will also demand that employees and owners are constantly learning new tools, updates and curating what makes the most sense for their needs, and that is time-consuming.

— Sabrina H. Habib, Ph.D., visual communications sequence head and associate professor, University of South Carolina School of Journalism and Mass Communications

AI could make it more affordable for small business owners to do simple tasks

AI doesn’t just make it easier to start a small business — it can make it more affordable, too. Small business owners can expect to spend widely different amounts on upstart costs, depending on the nature of their business, but on average, small business owners spend an average of $40,000 in their first full year, according to Shopify.

Some tasks that experts say could be automated — such as social media and competitor analyses — can add up quickly if you were to hire someone. Freelance social media managers make a median of $24 per hour, according to Glassdoor, while freelance business analysts make a median of $88,000 per year. However, with AI, small business owners may be able to automate those tasks and save money on upstart costs.

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What industries will thrive or be threatened by AI?

Rambarran: Industries that will thrive would be service providers, retail and e-commerce, and healthcare and wellness organizations. Digital marketing, AI consulting and data analytics businesses will see an increased demand.

Industries that would be at risk would be customer support services operating in the traditional service model, data entry roles, and local retail businesses and restaurants. AI chatbots are replacing call centers and live support agents. Artificial Intelligence can generate written content, legal templates and reports, reducing the need for human labor in these areas. Also, AI-powered delivery optimization and ghost kitchens (restaurants without dining rooms that operate entirely through delivery) could out-compete traditional local businesses unless they adapt.

Orbinati: Some industries are well-positioned to thrive with AI, while others are threatened. Businesses in e-commerce and digital marketing, for example, are already benefiting from AI’s ability to analyze customer behavior, optimize advertising and enhance user experiences. The healthcare and wellness industries are also seeing opportunities. For example, AI algorithms are being used to analyze CT scans of the chest to detect early signs of lung cancer. 

On the other hand, some industries are indeed starting to struggle. Traditional customer service roles are being replaced by chatbots and virtual assistants, reducing demand for human employees in entry-level support positions. Even creative industries, like writing, graphic design and voice-over work are starting to see shifts in demand as AI tools take over some aspects of content creation. 

Don’t just choose your next small business idea because it’s AI-proof

Even if you work in an industry that’s vulnerable to changes due to AI, like marketing or design, you can add a human touch that AI can’t. Check out Bankrate’s guide on to learn more about how to turn your idea into a full-fledged business.

Learn more

What are some ways AI might impact small businesses in the long term, in ways we don’t yet realize?

Kaisen: I don’t think enough attention is given to the notion that AI will replace tasks that people don’t want to do — answer emails, take notes or mutually inform colleagues of advances in their work to forgo excessive meetings (like Oracle’s new AI sales concierge). This will allow people to do tasks they want to do, which can reduce stress or allow for more productive discussions between colleagues that will improve businesses or lead to new ideas and businesses.   

Rambarran: Some long-term AI impacts that would potentially affect small businesses are decision-making powered by AI, hyper-personalization, views on regulations and ethics, and disruptive business models. In the future, AI could act as a “co-founder,” making strategic decisions by analyzing financials, market trends and customer behavior. Businesses might tailor products and services for individual customers in real-time, creating a completely customized consumer experience. As AI becomes more prevalent, small businesses may face new compliance challenges, particularly around data privacy and bias in AI decision-making. AI-driven automation could lead to more gig-based, decentralized businesses rather than traditional brick-and-mortar models.

Orbinati: One of the most significant changes may be the way businesses personalize customer experiences. AI-driven recommendations and automated interactions could make it possible for even the smallest businesses to offer highly customized products and services, rivaling what large corporations do today. I’m thinking of a small online boutique clothing store, for example. An AI tool would be able to capture all relevant psychographics (consumer values and goals) and demographics for people shopping their online store, and offer personalized recommendations on the spot.

Where you live matters for many small businesses

As AI grows more prevalent, where you operate your business matters. Some states are considering passing bills adding funding and regulations for AI in the workforce. Maryland, for example, passed a bill in 2024 funding job training in cybersecurity, health care, biotechnology, manufacturing and AI. If you plan on using AI in your business, check to see if you’re taking advantage of the benefits your state may have to offer.

Experts interviewed by Bankrate

Bankrate interviewed four experts from universities across the country for their insights about AI and its impact on small businesses:

Sabrina H. Habib, Ph.D., visual communications sequence head and associate professor, University of South Carolina School of Journalism and Mass Communications

Sabrina Habib studies the influence of technology on the creative process and teaching creativity — most recently focusing on AI. With a background in advertising, entrepreneurship, and arts, her creative activities complement her research and teaching. She led the development of the data and communication program at the College of Information and Communications and is currently serving as the AI coordinator for the college. Habib is also the chair of the visual communications sequence. Her administrative work is geared towards curricular innovation.

Josh Kaisen, Ph.D., post-doctoral fellow and managing director of the Human-Centered Artificial Intelligence Institute, University of Houston

Kaizen received his Ph.D. in Economics from the University of South Florida and his M.Sc. in Physics from the University at Buffalo where he was a CERN/CMS collaborator. Prior to joining the University of Houston, Kaizen worked as an Assistant Professor at St. Mary’s College of Maryland, a top liberal arts college, where he led a team of students to win a national policy design competition — which included presenting their policy in front of the US Congress — and a second team to place as finalists in the competition the following year. Kaizen has published in renowned journals across multiple disciplines — Science, Physical Review Letters A, and the Journal of Economic Behavior and Organization — and has an impressive research pipeline with several papers under review in top business journals. Kaizen applies skills developed in his physics background to conduct large-scale natural experiments surrounding relevant business outcomes. Kaizen now directs the corporate outreach and education initiatives for the Human-Centered AI Institute where he launched a seminar series, co-founded a student organization, and organized several events.

Albert Orbinati, Ph.D., department chair of business and associate professor of business administration, Champlain College Online

Albert Orbinati is an Associate Professor of Business Administration and the Department Chair of Business for Champlain College Online. He is also the owner of North Madison Publishing, a publishing house dedicated to books and content focused on health and wellness. Orbinati was the Vice President of Continuing Education at Medaille University, Dean of the School of Professional and Continuing Education at Russell Sage College, and Director of Online and Non-Traditional Programs at Utica University. He is a Major in the Vermont Air National Guard (VTANG) where he directs marketing efforts for VTANG recruiting and retention team.

Jeremy Rambarran, adjunct professor, Touro University Graduate School of Technology

Jeremy Rambarran is an Adjunct Professor at Touro University Graduate School of Technology and is a highly qualified IT professional with professional licenses from Texas A&M, as well as Cisco and an Advanced Certificate in Project Management. He currently works at the New York College of Podiatric Medicine, where he focuses on providing support to end-users and manages all hardware and software systems. He also teaches courses at the Touro University Graduate School of Technology (GST) and is building and implementing a cloud-based curriculum at Touro University New York School of Career and Applied Sciences (NYSCAS). He has ten years of experience in implementations, installations, configurations, monitoring and support of various hardware, software, and cloud-based systems.