Congress examines AI’s impact on small business growth

The House Committee on Small Business held a hearing this month on how artificial intelligence is changing the way small business operate. Lawmakers also looked at the challenges business owners face when adopting AI, and the programs meant to help them.

Leading the hearing, Rep. Roger Williams (R-Texas) said AI is rapidly becoming one of the most valuable tools available to small business owners.

“Artificial intelligence is no longer something reserved for big tech companies and Fortune 500 boardrooms. Today, nearly three-quarters of small businesses are using AI in some form. That is more than triple the share from just three years ago. Small businesses are closing the technology gap with big corporations faster than in any prior wave of innovation,” Williams said in a statement.

AI integration in SMBs

During the hearing, Jordan Crenshaw, Senior Vice President of the U.S. Chamber of Commerce’s Technology Engagement Center, testified that 58% of small businesses nationwide use generative AI.

Adoption reaches about 70% among smaller technology firms and 65% among smaller entertainment companies. About half of retailers, restaurants and other brick-and-mortar businesses use it too, he said.

What’s holding businesses back

About a third of small businesses that haven’t adopted generative AI point to regulatory uncertainty, Crenshaw said. Roughly one in five can’t find workers trained to use it, and another third aren’t sure how it applies to their business. Crenshaw called for clear national frameworks, including the Secure Data Act on data privacy. He also pointed to training programs like the AI for Main Street Act and the AI-WISE Act.

The hearing comes as federal data show small businesses narrowing the AI gap with larger companies. The Small Business Administration’s (SBA) Office of Advocacy reported in September that AI use among small firms climbed to 8.8%, nearly matching the 10.5% rate among large businesses. That’s a sharp turnaround from early 2024, when large firms used AI at nearly twice the rate of small ones. 

Small businesses are also facing a separate policy debate over data privacy as they build more AI into daily operations. The U.S. Chamber of Commerce has pushed for a national privacy standard to keep up.

What happens next

The AI for Main Street Act and the AI Wisdom for Innovative Small Enterprises Act (AI-WISE Act) both passed the House in January. Both bills now sit in the Senate, awaiting committee action, and would direct Small Business Development Centers to expand AI counseling and training for small business owners.

The Small Business Committee has not announced a follow-up hearing on AI. Williams said the committee and the SBA plan to keep expanding AI education resources for small businesses.