Across the country, lawmakers are rushing to regulate artificial intelligence (AI), restrict digitally-enabled pricing solutions, and attempting to break up major technology companies. More than 1,500 AI-related bills have already been introduced at the state level alone. At the same time, federal regulators continue to pursue sweeping antitrust actions against digital platforms. Amid this hasty wave of regulatory actions, entrepreneurs are reaping the benefits of the platform-based economy and tech innovation. Unfortunately, the bulk of proposed government actions would undermine entrepreneurship and the small business creation and growth lawmakers claim they want to promote.
These proposals are grounded in fear and do not reflect market realities or the benefits and use of digital tools. For millions of small businesses, e-commerce platforms, AI, and digital solutions are expanding opportunity and access to new customers, and letting entrepreneurs compete with companies many times their size. The market is highly competitive and dynamic.
Moreover, the tools and disruption created by these technologies have aroused America’s entrepreneurial spirit. Business applications have maintained a historically high, record-breaking pace since 2021, exceeding 5 million per year. A record 5.5 million business applications across industries were filed in 2023, and the pace of this activity continues to this day.
The proposed regulations, bans and breakups assume these technologies and the companies deploying them primarily benefit large corporations. New data from the Small Business & Entrepreneurship Council’s (SBE Council’s) 2026 Technology Use Survey conveys a far different and insightful story. The results track with findings the SBE Council has monitored since digitization accelerated during the Covid era – that entrepreneurs have become rapid adopters of innovative tech tools and their businesses are reaping extraordinary benefits from these technologies.
These tools, including AI, are now critical infrastructure for small businesses across the country. Adoption has moved well beyond experimentation, with AI, digital marketing platforms, e-commerce marketplaces, and automated pricing tools becoming core components of modern small business operations. For example, 82% of small business employers report using AI tools, 88% are multi-channel sellers, and 90% say they are confident in their ability to adopt digital tools and AI.
Policies and regulation that restrict or disrupt these critical tools would have serious downstream consequences for America’s small businesses.
The widespread adoption of AI bucks the gloomy narrative about the supposed negative effects on business, the economy, and workers. In fact, only 9% of business owners identify as “doom and gloomers.” And their positive experience is fueling AI investment - 93% plan to keep making investments in AI over the next year and 62% report they will increase these investments. AI is rapidly being deployed for a wide range of business functions such as research, marketing and sales automation, content creation, customer service, financial planning, project and social media management, and more.
Not surprisingly, small business owners report significant savings - a median of five hours per week of their own time and an average of 11.5 employee hours per week saved thanks to AI-driven efficiencies. Based on SBE Council estimates, the total in owner/employee time conservatively amounts to savings of $243.6 billion for small businesses on labor costs alone.
Time saved translates into more focus on innovation, customer engagement, and growth.
AI is producing revenue gains as well. Two-thirds of small businesses report revenue increases tied to AI adoption, including 22% reporting increases of more than 10%.
Yet many lawmakers are eager to overregulate AI before fully understanding how small businesses are using it, and how restrictive policies could affect job creators or U.S. competitiveness.
Many of the AI bills, along with the fragmented state-by-state regulation they would generate, means complex and costly compliance obligations, disclosure requirements, or outright restrictions on the use of AI. These are harmful outcomes for startups and small businesses. Policies should instead focus on promoting education, transparency, and best practices, while allowing adoption and innovation to move forward.
A related area where misunderstanding is a risk to small business competitiveness is regulatory activity tied to digitally-enabled or algorithmic pricing. State and local governments have proposed restrictions or bans on such tools, often based on the mistaken assumption that they are used by large companies to manipulate markets.
Our survey finds that pricing tools are increasingly popular with small businesses: 60% either use or plan to use pricing tools, including 35% who already use them. These tools have modernized the pricing process – a labor-intensive and difficult task for small businesses – that helps them more efficiently monitor competitors, optimize promotions, adjust prices based on demand, and manage inventory more effectively. The impact is overwhelmingly positive, as 94% of small business owners say the tools improve their competitive position.
Banning or restricting these tools would primarily harm small businesses by taking away a tool that helps them compete with bigger businesses.
Finally, some lawmakers and regulators continue to argue that breaking up major technology companies would promote competition and help small businesses. Again, this outdated view belies what is actually happening in the marketplace. In fact, 74% of entrepreneurs say digital platforms make it easier to compete with larger companies.
Tech platforms and the tools they provide have dramatically lowered the barriers to entry for starting a business, finding customers, and scaling a business to take advantage of growth opportunities. For example, among small business that sell on Amazon, 98% percent say the platform’s pricing structure enables them to compete and 94% report that Amazon provides them with significant support. Indeed, perhaps nowhere is the gap between political narratives and small business reality more apparent than in the ongoing Federal Trade Commission lawsuit against Amazon, which is premised on the idea that Amazon harms competition and exploits small sellers.
The broad policy lessons from the survey are clear. While lawmakers have a role to play in ensuring that new technologies are used responsibly, regulation should be informed by evidence, not assumptions or fear.
Before lawmakers rush to regulate AI, ban pricing tools, or dismantle digital platforms, they should take a closer look at how America’s entrepreneurs are actually using these technologies. For millions of small businesses, digital solutions are engines of productivity, innovation, and opportunity. The greatest risk today is not that these technologies will move too quickly, but that lawmakers will threaten access and innovation and therefore undermine the very small businesses they claim to protect.
