Applications for No-Employee US Businesses Rise 26.8% in AI-Exposed Industries

Over the same period, applications in those industries that showed stronger signs of eventually becoming employers fell 6.4%. In construction and wholesale trade, which Palagashvili used as a comparison group, applications for non-employer-type businesses fell 0.4%. The pattern suggests AI tools are making it cheaper to start and run a company alone, which matters for labour markets, for small-business lenders and for the platforms that sell to these firms.

Palagashvili, who directs the Labor Policy Project at Mercatus, cautioned that the findings are preliminary and descriptive and do not establish that AI caused the increase. The Census-based measure flags applications without indicators of near-term payroll or hiring plans; it does not show whether those businesses stayed one-person operations. "What AI is doing is giving those capabilities directly into the hands of the individual," she told CNBC.

The owners CNBC interviewed describe AI replacing work that once went to staff or contractors. Alex Willen expects the 12 e-commerce brands he runs without employees to bring in between $2.5 million and $3 million this year. He uses Anthropic's Claude for bookkeeping, customer service, advertising and inventory, and OpenAI image tools in place of photographers and designers. A traditional product photo shoot could cost $2,000 to $5,000, he said. Without AI, he said, he would probably need one more full-time employee plus contractors for photography, design, bookkeeping and ad management.

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

Stanford economist Erik Brynjolfsson said the common misconception is that AI is only about individual productivity, when it is "actually about leveraging AI to perform tasks that previously required a whole team." A FreshBooks survey found that 79% of solopreneurs had tried AI before hiring someone for a task they could not do themselves.

Data on established small firms tells a different story. Payroll provider Gusto found that businesses that adopted AI had about 7% more staff after a year than comparable businesses that knew about AI but had not adopted it. Among firms with fewer than 10 employees, adopters grew headcount about 10% more than non-adopters.

The smaller firms also remain dependent on large platforms. About 80% of Willen's revenue still comes through Amazon, and LinkedIn has been one of Ginn's biggest sources of customers. Brynjolfsson said the spread of small producers can make the platforms that connect them with buyers more powerful, and he expects AI to produce larger firms on average even as solo businesses multiply.

Whether the surge in no-employee applications turns into lasting businesses, or into firms that eventually hire, will only become clear as later Census data tracks what happens to them.