AI use by businesses is small but growing rapidly, led by IT sector and firms in Colorado and DC

The rate of businesses in the U.S. using AI is still relatively small but growing rapidly, with firms in information technology, and in locations like Colorado and the District of Columbia, leading the way, according to a new paper from U.S. Census Bureau researchers.

Overall use of AI tools by firms in the production of goods and services rose from 3.7% last fall to 5.4% in February, and it is expected to rise in the U.S. to 6.6% by early fall, according to the bureau’s Business Trends and Outlook Survey released this spring.

The use of AI by firms is still rather small because many businesses haven’t yet seen a need for it, Census Bureau researchers said in an accompanying paper.

“Many small businesses, such as barber shops, nail salons or dry cleaners, may not yet see a use for AI, but this can change with growing business applications of AI,” they said. “One potential explanation is the current lack of AI applications to a wide variety of business problems.”

Few firms utilizing AI tools reported laying off workers because of it. Instead, many businesses that use AI were expanding compared to other firms. They also were developing new work flows, training staff on the technology and purchasing related services, the researchers said.

The rate of AI use among business sectors varied widely, from 1.4% in construction and agriculture to 18.1% in information technology. Larger firms were more likely to be using the technology than small and midsize firms, but the smallest firms used it more than midsize businesses, according to the researchers.

The type of work AI was used for the most included marketing tasks, customer service chatbots, getting computers to understand human languages, text and data analytics and voice recognition.

Erik Paul, the chief operating officer of a software development company in Orlando, has been using AI tools for about a year to generate images for marketing materials, help write compliance paperwork that can be tedious and compare different versions of documentation for products.

“It has become an integral part of our day,” Paul said Thursday. “But the problem is, you can’t trust it. You can never blindly copy and paste. Sometimes the context gets thrown off and it throws in erroneous details that aren’t helpful or change the tone of the topic you are writing about.”

The two places with the nation’s highest AI use by firms, Colorado and the District of Columbia, had adoption rates of 7.4% and 7.2%, respectively. Not far behind those states were Florida, Delaware, California and Washington State. Mississippi had the smallest AI use with 1.7% of firms.

The survey showed some ambivalence among firms about whether they will adopt AI to their businesses in the near future or continue using it. Two-thirds of firms not yet using AI reported that they expect to remain non-users, and 14% of firms not yet using the technology were unsure if they would do so down the road.

Around 14% of current users reported that they didn’t expect to continue utilizing AI in the near future, “potentially indicating some degree of ongoing experimentation or temporary use that may result in de-adoption,” the researchers said.

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