National ACE and Partners Reveal How Small Businesses Are Turning to AI for a Competitive Edge
Reimagine Main Street Survey—Conducted in Collaboration with National ACE—Reveals that 82% Think Adopting AI is Essential to Stay Competitive in Today’s Business Environment
FOR IMMEDIATE RELEASE
June 11, 2025
PRESS CONTACT
Emily Fuder: efuder@nationalace.org
SAN JOSE, CA and WASHINGTON, D.C. [June 10, 2025] — Over 50% of small businesses are exploring AI implementation in their operations, according to a new survey led by Reimagine Main Street—a project of the Public Private Strategies Institute—in collaboration with the National Asian Pacific Islander American Chamber of Commerce and Entrepreneurship (National ACE) and 13 other national organizations, with support from PayPal. The survey of nearly 1,000 small businesses with annual revenue between $25,000–$5,000,000, also found that 25% have already integrated AI into daily operations. These findings reveal that the adoption of artificial intelligence (AI) among small businesses has reached a tipping point—evolving from a question of “if” to “when.”
“Small business owners are already putting AI to work,” said Tammy Halevy, Executive Director, Reimagine Main Street. “One in four are using it today, and more than half are exploring the possibilities of AI for their businesses. But these ‘Explorers’ want to see how AI advances their businesses. They need tools that are simple to use, secure, and built for how they actually run their businesses. And it matters — because when small businesses adopt AI in ways that work for them, the benefits will also accrue to local economies, supply chains, and the broader economy.”
The survey identified three distinct segments of small businesses: “Active Users” who have already integrated AI into daily operations, “Explorers” who are testing or researching AI solutions but haven't fully committed, and “Non-Users,” those with no current plans to use AI.
Advancing to Strategic Applications
Having experienced AI’s early benefits, Active Users are now seeking more sophisticated capabilities that move beyond efficiency to provide strategic business advantages:
Business Automation: More than three in four (77%) report that marketing and customer engagement represent uses where new AI solutions would have the greatest impact to their businesses, with 84% willing to automate the creation of marketing content and 59% willing to automate customer service inquiries.
Financial Intelligence: 53% report AI-powered cash flow forecasting would solve a “critical pain point.”
Predictive Revenue: 45% are extremely likely to adopt a tool that predicts revenue trends to help with staffing, inventory, and marketing decisions.
Real-Time Customer Insights: 40% are extremely likely to adopt tools providing real-time trend analysis of customer buying behavior in order to recommend dynamic pricing and promotions.
“This comprehensive survey clearly illustrates how AI is fundamentally changing small business operations,” said Rhett Buttle, President of Public Private Strategies Institute. “As businesses experience tangible benefits from initial applications, they are seeking increasingly sophisticated solutions that can transform their decision-making processes and competitive positioning. What we’re seeing is a strategic shift where small businesses recognize that AI isn’t just a nice-to-have tool for saving time—it's becoming essential for maintaining competitiveness in today’s market.”
AI Is On The Verge of Widespread Small Business Adoption
“When it’s accessible, understandable, and built for real-life use, AI can be a great equalizer for small businesses,” said Michelle Gill, General Manager, Small Business and Financial Services, PayPal. “At PayPal, we see the opportunity that AI presents to our merchants, specifically small businesses. We are developing AI-driven tools that act as smart partners to small businesses allowing them to reap the benefits of AI – from delivering personalized shopping experiences to order fulfillment to merchant discoverability – in a safe, simple and scalable way.”
The largest segment—51% of surveyed businesses—are “Explorers” experimenting with AI tools but not yet fully committed. Despite interest and enthusiasm, these businesses face barriers:
Security Concerns: 38% worry about data privacy and security
Resource Constraints: 37% lack the time or resources to properly explore tools
Uncertain Value: 34% don’t yet see a clear use case or return on investment
The survey reveals these Explorers aren’t skeptical—they’re stuck. Explorers are hungry for AI solutions but need specific support to move forward, including proven business value (74% would adopt with clearer ROI evidence), user-friendly solutions (73% want easier-to-use AI tools), and practical training (ranked as the top support need across all segments).
Together, Active Users and Explorers represent 76% of small businesses—indicating not resistance to AI adoption, but rather varying stages of engagement on a trajectory toward adoption. The question for most small businesses is no longer whether to adopt AI, but rather how quickly and in what ways.
What's Driving the March to Adoption:
Competitive Necessity: 66% of small business owners believe “adopting AI is essential for staying competitive,” with 78% of current users and 69% of explorers feeling pressure to adopt AI to keep up with competitors.
Building Resilience Against Uncertainty: 63% of current users believe AI could help their businesses become more resilient during economic challenges.
“As a small business owner, I’ve seen firsthand how AI has transformed my daily operations,” said Katrina Golden, Owner of Lil Mama's Sweets and Treats. “What used to take me hours now takes minutes, giving me back time to focus on growth strategies and customers. But it’s not just about efficiency, it’s about using this as a tool to stay competitive in a rapidly evolving marketplace.”
Reimagine Main Street performs research to generate data-driven insights and regularly convenes small business leaders, investors, experts, and policymakers to address opportunities and barriers for small businesses. PayPal has collaborated with Reimagine Main Street since 2020 when the initiative launched as a response to the impact of COVID-19 on small businesses and the people they employ. Today, Reimagine Main Street and PayPal continue to partner to help small businesses navigate another wave of rapid change: AI.
For more information about the survey and its findings, visit https://www.reimaginemainstreet.org/ai-and-small-business-survey
The following organizations partnered to field this survey:
Chiling Tong, President and CEO, National Asian Pacific Islander American Chamber of Commerce and Entrepreneurship (National ACE): “This data affirms what we see every day: small business owners in the AAPI community are embracing new technologies like AI with enthusiasm and openness. Their leadership in adopting innovation is shaping the future of our economy.”
Carolina Martinez, CEO, CAMEO Network (California): “Small business owners are innovators at heart — and this survey shows they’re eager to explore how AI can help them save time, forecast growth, and market to their audiences. But, it also highlights the need for more accessible tools and training to ensure every entrepreneur, no matter their background or resources, can benefit from this technology. At CAMEO, we’re committed to making sure small businesses aren’t left behind in the AI revolution.”
Jill Houghton, President and CEO, Disability:IN: “AI offers tremendous potential to break down barriers. The fact that these findings show business owners with disabilities are leading in AI adoption underscores the urgent need for policies and support systems that prioritize accessibility from the start. As AI reshapes the business landscape, we have a responsibility to ensure that innovation is inclusive — providing the tools, training, and infrastructure so every entrepreneur, including those with disabilities, can fully participate and thrive.”
Jennifer Garcia, COO, Latino Business Action Network (LBAN): “Latino business owners have long demonstrated resilience and a forward-looking mindset, and their embrace of AI is a powerful reflection of that drive to innovate and grow. Our data shows that scaled Latino-owned companies are at the forefront of AI adoption. As this technology rapidly evolves, we must ensure all Latino entrepreneurs have access to the tools, training, and support they need—not just to adapt, but to lead in the age of AI.”
Keith R. Hall, President and CEO, National Association for the Self-Employed (NASE): “AI is already changing the way America’s self-employed do business — especially when it comes to reaching customers and staying competitive. But for solopreneurs, it can’t just be about big promises. AI adoption has to be affordable, and it has to come with real-world training that fits their day-to-day reality. If we want these businesses to thrive, we need to make sure the self-employed aren’t left to figure it out on their own.”
Todd McCracken, President and CEO, National Small Business Association (NSBA): “The fact that small business owners are eager to embrace AI shows their resilience and adaptability — but it also underscores a critical issue: if we don’t act now, the gap between those who can afford to invest in these technologies and those who can’t will only widen. For AI to truly benefit our economy, we need to ensure that small businesses, particularly the ones that drive local economies, aren’t left behind. Solutions that make training accessible, lower the cost of adoption, and level the playing field are essential if we want to see small businesses thrive in the digital age.”
Jen Earle, CEO, National Association of Women Business Owners (NAWBO): “Women-owned businesses are exploring AI solutions at impressive rates. However, despite similar adoption rates, women entrepreneurs continue to face barriers when it comes to tailored support and marketing. As we move forward, it's crucial that we not only foster more inclusive innovation but also ensure that women-owned businesses have equal access to the tools and resources to succeed in the digital economy.”
Gil Pontes, Executive Director, NextGen Chamber of Commerce: “AI technology is reshaping the future of business, and the next generation of entrepreneurs is leading adoption. What does this mean? We must be focused on making sure that young, diverse, and forward-thinking business leaders have equitable access to AI education, resources, and opportunities — so they can compete, innovate, and thrive in a rapidly evolving economy.”
Ying McGuire, President and CEO, National Minority Supplier Development Council (NMSDC): “Empowering minority-owned businesses with access to advanced AI tools and training is essential for accelerating their growth and long-term success. As technology rapidly evolves, minority business enterprises must be equipped to adapt and compete. Adopting AI is not just about innovation but also about unlocking economic opportunity and enhancing business performance across industries."
Ramiro A. Cavazos, President and CEO, United States Hispanic Chamber of Commerce (USHCC): “America’s small businesses are fueling our nation’s economic growth and prosperity. Access to emerging technologies, including AI, will ensure that momentum continues. This survey highlights that the Latino business community has shown strong openness to use AI, and we must expand career and technical education to equip our workforce with the skills needed in today’s evolving economy.”
Pamela Prince-Eason, President and CEO, Women’s Business Enterprise National Council (WBENC): “We believe that embracing and deploying AI tools is essential for women-owned businesses' continued growth and success. In today’s digital landscape, staying competitive means leveraging AI to drive innovation, improve sustainability, and maintain long-term market presence. Women entrepreneurs must have equitable access to the technology, training, and support they need to adapt and grow. We are committed to empowering women business owners with the cutting-edge tools and knowledge to thrive in this new era of opportunity.”
Angela Dingle, CEO, Women Impacting Public Policy (WIPP): “AI is a game-changer for small businesses. Women entrepreneurs are already leaning in — but they’re not getting the support they need. This survey highlights that while men and women use AI at similar rates, women report a greater need for support, training, and resources — yet are half as likely to be directly marketed to by tech providers. In order to innovate and compete in the evolving AI economy, women entrepreneurs must have equal access to support and education. At WIPP, we will continue to advocate for fair access to these tools for all women entrepreneurs.”
*Source: National survey of 947 small businesses fielded by Reimagine Main Street and 14 partners with support from PayPal, May 2025
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About Reimagine Main Street
Reimagine Main Street, a project of the Public Private Strategies Institute, is a multi-stakeholder, cross-sector initiative that brings small business leaders, investors, experts, and policymakers together with business owners and the people they employ. We engage diverse stakeholders and develop data-driven insights to shape and inform market opportunities and policy. For more information, please visit reimaginemainstreet.org
About Public Private Strategies Institute
The Public Private Strategies Institute (PPSI) is an independent research and education organization. PPSI engages in educational activities concerning the public and private sectors’ roles in advancing societal change. PPSI explores best practices and trends through research, publications, and educational events. Additionally, it produces educational and informational content that will educate public and private sector actors about their capacity to be agents of social change; and conduct research into the existing landscape of public and private social responsibility and the potential for the future. For more information, please visit ppsi.org.
About PayPal
PayPal has been revolutionizing commerce globally for more than 25 years. Creating innovative experiences that make moving money, selling, and shopping simple, personalized, and secure, PayPal empowers consumers and businesses in approximately 200 markets to join and thrive in the global economy. For more information, visit https://www.paypal.com, https://about.pypl.com/ and https://investor.pypl.com/.
About National ACE
National ACE’s mission is to serve as a strong advocate of AAPI and all small business interests and positive change on all issues that enhance and advance the goals and aspirations of business owners, entrepreneurs, and corporate leaders. National ACE strives to do this by supporting and promoting issues that impact the small business community, improving the economic development and impact of the AAPI community, advancing coalitions, enhancing community building, and fostering the next generation of entrepreneurs and executives. National ACE provides a unified voice for the business interests of AAPIs and all small businesses nationally. Learn more at www.nationalace.org.