AI Adoption Is Accelerating on Main Street

Small businesses are no longer just experimenting with artificial intelligence. They are actively integrating it into their day-to-day operations. In many cases, they rely on it to stay competitive.

I was recently in L.A. on behalf of Hello Alice hosting hundreds of entrepreneurs at Google’s famous Spruce Goose Hangar. Seems fitting that wildly brilliant and a little unhinged Howard Hughes made history in the building. Now with AIsmall business owners are able to build faster than ever.

How small businesses are actually using AI

New data from Hello Alice’s Main Street Rising Tour surveyin partnership with PayPal and Google, underscores how quickly this shift is happening and where challenges still remain.

According to the research, 81% of small business owners say they are excited about AI, while only 47% report using it on a daily basis. Looking ahead, 51% believe AI will be critical to their business over the next two years, reflecting a broader shift from early curiosity to long-term reliance.

That adoption is already translating into real operational changes. Small business owners report using AI for various reasons — 73.2% for marketing content, 67.3% for research, and 39.4% for operational systems. These use cases are not just convenient add-ons. Seventy percent of respondents say AI is helping them work more efficiently, while 38.6% point to improvements in customer experience and 35.7% experienced reductions in operating costs.

While in L.A., I listened to actors and entrepreneurs Adam Shapiro and Katie Lowes talk about how AI is transforming not just their personal lives but also the creative community. However, Grammy-nominated singer and composer Kenna, said that while AI is transforming the music industry, it will never replace the creative soul needed to drive the notes.

What’s holding back deeper AI adoption

Despite this momentum, adoption is far from frictionless. About 32.9% of respondents report spending nothing on AI tools each month, suggesting that cost sensitivity and uncertainty still influence how deeply businesses invest. More significantly, the barriers small business owners identify are largely practical. Small business owners cite the learning curve, tool trust, and data privacy as their top concerns.