America’s newest small business owners with no employees are off to a hot start in AI era

AI is helping some small businesses expand their output without hiring at the pace once required, while also potentially making large companies larger. Economist Erik Brynjolfsson says this could squeeze mid-sized firms, reducing management layers as very small teams and large organisations gain an advantage.

Adam Branch says his earlier technology services company grew to about 500 employees, whereas his AI firm rhino.ai has roughly 50 and completes comparable work with three to four times the productivity per employee. He estimates labour accounts for 40% of rhino.ai’s operating costs, compared with 85% at his former company. An AWS study of 3,413 startup leaders across 20 countries found AI-focused startups grew revenue by an average of 156% a year, versus 65% for startups overall.