The Revival of American Entrepreneurship! The Era of Building Companies with ChatGPT: How Small Businesses are Transforming the U.S. Economy

The Seeds of Small Business Found in Uncharted Territories

Large enterprises do not always start with grand technologies or world-changing inventions. Often, the starting point is a small inconvenience felt in everyday life.

For Cassidy Winkler, who lives in Wisconsin, USA, the impetus was simply that "there wasn't a Pilates studio nearby that I wanted to attend."

At the time, she was working as a flight attendant on private jets. The job of transporting professional athletes and others had its ups and downs, and during the slow periods, she found herself with more free time. She wanted to resume Pilates, which she had been familiar with since her student days, but couldn't find a suitable studio near her home.

If that's the case, why not create one herself?

She began researching the qualifications needed to become an instructor, equipment, pricing structures, location, and brand building. She also utilized generative AI, including ChatGPT. She used AI as a sounding board for ideas such as potential store names, logo directions, business plans, customer communications, and marketing proposals.

Thus, "Revel Method Pilates" was born, expanding its stores to Lake Geneva, Madison, and Monona. The company now employs about 65 people, with plans for further new store openings.

This case symbolizes not just the popularity of Pilates, but the arrival of an era where the knowledge and work needed to turn an idea into a business can be procured by small teams.

The Surge in Business Formation Applications in the U.S.

Entrepreneurs like Winkler are not unique.

In 2025, about 5.7 million business formation applications were filed in the U.S. This is the highest level since the U.S. Census Bureau began recording under the current method. It surpassed approximately 5.5 million in 2023 and about 5.4 million in 2021.

The momentum has not waned even into 2026. According to the U.S. Census Bureau, business formation applications in June 2026, seasonally adjusted, reached 531,423, a 1.1% increase from the previous month.

Simply multiplying by 12 would exceed 6 million annually. While there are monthly fluctuations, it is clear that the entrepreneurial fever post-pandemic has not ended as a temporary phenomenon.

In the U.S., the birth of new companies and the economic presence of young companies had been declining for years, raising concerns about the "decline in business dynamism." As concentration in existing large companies progresses and the power of new entrants to shake the market weakens, it affects competition, innovation, productivity, and regional employment.

The long-term stagnation trend is being reversed by the surge since 2020.

The Pandemic Changed Employees' Values

The first trigger for the entrepreneurial boom was the COVID-19 pandemic.

Mass layoffs and business closures suddenly took away jobs that were thought to be stable. Meanwhile, the spread of telecommuting shattered the notion that one must go to the company office every day to work.

More people began to use the time they spent commuting for side jobs, and methods of providing products and services from home rapidly spread. Online payments, e-commerce, video conferencing, cloud accounting, delivery services, and social media advertising became the infrastructure supporting individual businesses.

The biggest change was likely the psychological shift among workers.

"If staying with a company isn't necessarily safe, wouldn't it be better to have my own business?"

"Isn't relying on a single employer for income the real risk?"

More people began to think this way.

The increase in entrepreneurship during the pandemic may have included formal applications to utilize government support measures. However, even after the support systems ended, business formation applications remained higher than pre-pandemic levels. Furthermore, the increase accelerated again from late 2024 to 2025, indicating that the current trend cannot be explained as merely a special phenomenon during emergencies.

Generative AI Eased the "First Step"

Generative AI is believed to be further boosting the current entrepreneurial boom.

In the past, starting a company required various specialists and collaborators. Someone to research the market, someone to create a website, someone to write advertising copy, someone to handle design, someone to create financial plans, and someone to handle customer service. You either had to acquire each skill yourself or outsource it.

Generative AI does not completely replace all of these. However, it significantly reduces the time and cost to create the first draft from scratch.

For example, entrepreneurs can ask AI to perform tasks such as:

Organizing market size and potential competitors. Setting customer personas. Thinking of business names. Comparing service pricing options. Creating a draft business plan. Writing website content and advertising copy. Drafting responses to customer inquiries. Creating simple programs or prototypes of reservation systems.

Initial considerations that used to take weeks can now be advanced in days, or in some cases, hours.

Even those who previously gave up due to a lack of expertise can understand the necessary steps by asking AI questions. While generative AI does not provide funding itself, it lowers the psychological barrier of "not knowing where to start" when starting a business.

This effect is not limited to innovative technology companies. It is significant for traditional small businesses in beauty, health, education, food and beverage, repair, consulting, and local services.

The characteristic of this change is that not only companies selling AI itself but also ordinary businesses using AI as a backstage tool are increasing.

The Main Players Are Not Large Corporations but "One-Person Companies"

However, caution is needed in interpreting the numbers.

The U.S. Census Bureau's business formation applications are primarily based on applications for employer identification numbers. Submitting an application does not necessarily mean starting operations. Even if operations begin, there may be no sales, or the business may close in a short period.

Furthermore, many of the businesses currently increasing are likely those operated by the founder alone, rather than companies that hire employees.

Stripe's economic analysis division points out that the recent increase in applications is not matched by a similar increase in "high-probability applications" likely to hire employees. However, the company's payment data shows that new businesses are reaching a certain transaction scale faster, which cannot be explained by dormant companies or fraudulent applications alone.

In other words, the current boom should be understood as "individuals starting economic activities as small business entities" rather than "a large number of new large corporations being born."

Video streamers, newsletter writers, online instructors, designers, consultants, small software developers, and operators of community-based services, who were traditionally called freelancers, are now operating as small companies equipped with payment, sales, and customer management.

AI particularly empowers these "solopreneurs," or solo entrepreneurs.

Young People Are Starting to Choose Entrepreneurship Over Companies

The mindset of the younger generation is also changing.

A survey by LendingTree of 2,000 U.S. consumers found that 27% had seriously considered starting a business in the past year. Among Generation Z, that percentage reached 51%.

This does not mean that half of young people will actually start a company. It is an awareness survey by a research company, and the number of respondents and the influence of the questions must be considered.

Nevertheless, it is certain that success is no longer modeled solely on getting a job, getting promoted, and staying with the same company for a long time.

For a generation that sees small brands rapidly growing through social media and can open websites and online stores at low cost, entrepreneurship is not a path only for the wealthy or those with an MBA.

On the other hand, many people considering entrepreneurship have not progressed to funding. In the same survey, fewer people applied for loans or sought external investment compared to those who researched ideas or checked legal requirements.

Interest in entrepreneurship is strong, but many are still in the "trying it out" stage.

Growth in Professional Services and Lifestyle Businesses

Looking at business formation applications by industry in 2025, the largest percentage was professional, scientific, and technical services. This includes law, accounting, taxation, consulting, design, and IT-related services, accounting for 18.8% of the total.

Next was construction at 12.8%, followed by "other services," including repair, maintenance, and personal services, at 11.9%.

The term "entrepreneurial boom" might conjure images of AI apps and Silicon Valley startups, but in reality, businesses that support local living account for a large percentage.

Home repairs, cleaning, caregiving, fitness, education, accounting, and food services focus on trust with customers and on-site services. They cannot be completed by AI alone.

However, if indirect tasks such as reservation management, advertising, estimates, customer service, hiring, and accounting preparation can be streamlined with AI and cloud services, small business owners can focus on their core business.

Winkler's Pilates business did not have AI conducting lessons. Customers paid for the actual studio, equipment, instructors, and the quality of the experience.

AI functioned not as the business itself but as training wheels to help launch the business.

Voices on Social Media Welcome the "Democratization of Entrepreneurship"

When the original article was published, positive reactions poured in on X and LinkedIn.

The technology company support group Tech expressed the view that AI has made it easier for more people to create businesses, and the results are beginning to show in the numbers.

Posts from entrepreneurs and investors also praised AI for supporting market research, prototype creation, writing, and software development, allowing small teams to accomplish larger tasks than before.

On LinkedIn, there were posts interpreting that the U.S. is "at the entrance to a new era of entrepreneurship," predicting further increases in new businesses.

Underlying this optimism is the expectation that people who had ideas but lacked funding, technology, or connections can now participate in the market for the first time.

Previously, starting a business required a certain amount of capital and a team. If AI and online services relax those conditions, the range of people who can start a business expands.

This can be called a change towards the "democratization of entrepreneurship."

Skepticism Over "Applications Are Not Successes"

On the other hand, strong doubts were expressed on Reddit about the bright headline of the original article.

A representative point is that "an increase in business formation applications is not the same as an increase in sustainable companies."

Some people start individual businesses out of necessity due to job insecurity or layoffs, and portraying this as a pure revival of entrepreneurial spirit is too optimistic, critics say.

There were also voices saying that while creating prototypes with AI has become easier, finding customers, getting them to pay, and having them use the service long-term has not become easier.

If the cost of creating products decreases, competition increases simultaneously. A large number of similar apps, online services, advertisements, and content could flood the market with low-quality products.

Another post expressed concern that AI's tendency to always provide positive responses to users might lead to overestimating ideas with little demand.

However, even within skeptical communities, there were opinions acknowledging the effectiveness of using AI for one-time administrative tasks such as company formation procedures, documents, basic tax matters, and initial research.

When organizing discussions on social media, the point of contention is not whether AI can support entrepreneurship.

Many people show a certain understanding of AI assisting in the initial work of starting a business. The issue is whether the businesses that have become easier to start can lead to quality products, stable revenue, and employee employment.

True Success Cannot Be Measured by "How Many Companies Were Born"

Of the approximately 531,000 applications submitted in June 2026, the U.S. Census Bureau predicts that 29,741 will grow into entities with payroll within the next four quarters.

This number shows that not all applications should be regarded as equally valuable "new companies."

However, businesses without employees do not lack economic value.

If more individuals generate hundreds of thousands of dollars in sales annually, the way of working and income distribution will change. Even if the individual shifts from being an employee to a revenue generator, it has economic significance. They may also outsource work to external accountants, designers, delivery companies, and advertising agencies.

On the other hand, if many small businesses compete with low income and lose social security and employment stability, it becomes a shift of employment relationships onto individuals rather than a revival of entrepreneurial spirit.

To evaluate the entrepreneurial boom, it is necessary to check not only the number of applications but also the survival rate, sales, profits, wages, number of employees, and productivity a few years later.

The Most Important Skill in the AI Era: "The Ability to Verify Reality"

Generative AI can be an excellent advisor. However, it cannot be the final decision-maker.

Market analysis created by AI may contain outdated information or errors. It is dangerous to trust information related to laws, taxes, permits, medical, and safety as is.

Even if business names and advertising copy can be created quickly, trademark checks and customer interviews are separately necessary. Even if an attractive business plan is completed, whether actual customers will pay must be verified in the market.

What entrepreneurs need in the AI era is not the ability to create everything themselves.

It is the ability to question AI's answers, consult experts, observe customer reactions, and accept inconvenient data.

Lowering the entry barrier does not necessarily lower the success barrier. In an era where anyone can easily create products, the ability to discern what is truly needed becomes more important than ever.

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