Citadel Securities Says AI Can Lift 40% of US Output Through Small Businesses
Updated
Updated · Business Insider · Jul 8
Citadel Securities Says AI Can Lift 40% of US Output Through Small Businesses
3 articles · Updated · Business Insider · Jul 8
Summary
Citadel Securities argued AI is already strengthening the US economy by giving small businesses cheaper access to scale, helping founders expand before they reach traditional size thresholds.
Nearly 40% of US economic output comes from small businesses, the firm said, making AI's effect on staffing, operations and market reach potentially more important than the current focus on frontier labs and data centers.
Frank Flight said AI lowers barriers to business formation and increases founder leverage across sectors, especially for firms outside major metro areas that have long faced resource and staffing constraints.
The note pushes back on warnings that US exceptionalism is fading and on fears of broad job destruction, arguing automation will also open new business lines and, over time, support more hiring.
AI is fueling an entrepreneurship boom, but is it erasing entry-level jobs for the next generation?
Can a 19th-century economic theory truly predict whether modern AI will create more jobs than it destroys?
AI Adoption Surges Among US Small Businesses: 61% Increase in Daily Use, Job Creation Outpaces Losses
Overview
Citadel Securities’ July 2026 analysis highlights an optimistic outlook for the US economy, emphasizing that artificial intelligence (AI) will be a profoundly positive force, especially for small businesses and entrepreneurs. The report explains that the US economy’s strong capacity for innovation and adaptation uniquely positions it to harness AI’s benefits. AI enables small businesses to pool resources, achieve scale economics before fully scaling, and lower the threshold for expansion, making it easier and more cost-effective to launch and grow new ventures. This environment is expected to boost entrepreneurship and drive new business formation across AI-exposed sectors.