Citadel Securities says AI will enhance America's 'hustle culture' as new business applications hit 5.6 million

One prominent capital market firm is praising artificial intelligence as the launchpad for a new era of American entrepreneurship.

"Automation can reduce the labor intensity of certain tasks, but in an economy with unusually high entrepreneurial velocity, it can also broaden the range of viable enterprise," the July 4 note (1) from head of macro strategy Frank Flight at Citadel Securities said, describing it as "dynamism" that offsets the risk of losing employment due to AI.

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The note went on to argue that AI could lower barriers of entry while also minting a new class of entrepreneurs who dive head-first into AI.

"AI may pay its greatest dividend by compounding America's hustle culture," it said.

A small business boom has been underway in the U.S. in the years following the pandemic. The number of new business applications reached 5.6 million (2) in 2025. By comparison, there were 3.5 million applications in 2019, per Census Bureau data. (3)

Now, economists say that AI is facilitating the boom by allowing workers to split off from employers and start their own business — and it's already generated a new label (4): solopreneur.

"We've never created as many businesses," Torsten Slok, chief economist at Apollo Global Management Inc, told Bloomberg (5). "It does tell you that AI is playing a very big role."

Professions exposed to AI displacement such as lawyers, advertisers and certain white-collar jobs are actually paving the way (6) in adopting AI. Employing AI, some analysts say (4), reduces barriers to entry since large language models can carry out tasks such as perfecting a business plan or enhancing social media reach that connects business owners to new customers.

Flight said in the analyst note that "there appears to be a positive correlation between new business creation and sector-level AI exposure." He went on: "In other words, the sectors most exposed to AI are also seeing some of the strongest formation impulses."

Small businesses have long been a significant driver of American employment. About 46% of American workers are employed by small businesses, according (7) to the Small Business Administration. Now, nearly 30 million solopreneurs make up nearly (8) 7% of U.S. economic activity — and those figures are projected to grow in the coming years.

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Some analysts argue that the benefits of AI adoption will flow in larger dividends to the small private firms that are a longstanding engine of the U.S. economy.

"The U.S. economy's extraordinary capacity to innovate, augment and adapt leaves it uniquely well positioned to capitalize on the gains from artificial intelligence," Flight wrote. "Those gains may accrue most powerfully to the bedrock of the American economy: small businesses and entrepreneurs."

Still, analysts simultaneously observe that an AI-powered boom hasn't delivered robust job growth in tandem. At least, not yet. Many of these new small firms are pausing plans (9) to expand or are downsizing their workforces instead, given the numerous economic headwinds such as a hike in interest rates, elevated inflation from tariffs and now higher energy prices.