Artificial intelligence is proving to be a powerful catalyst for the creation of new businesses, with a notable surge in entrepreneurship among Generation Z, individuals under the age of 30. This trend is detailed in a recent report by Gusto, a prominent payroll software firm that serves approximately half a million small businesses across the nation.
The findings indicate that AI tools are not only streamlining the initial setup phases of business ventures but also reducing associated costs, making entrepreneurship more accessible than ever before. This acceleration is particularly pronounced among younger entrepreneurs who have grown up with digital technologies and readily integrate AI into their operational strategies.
Justus Shaw, a 25-year-old entrepreneur from Nashville, exemplifies this new wave of business creation. Shaw, whose family has a strong connection to the coffee industry, leveraged AI to launch Shaws Coffee Cart, a mobile espresso business. He found that AI assistants, such as Claude, were instrumental in navigating the complexities of starting a business.
"Big Claude guy, so shoutout Claude," Shaw remarked, highlighting the chatbot's utility. He explained that he frequently consulted his AI assistant for guidance on a wide array of business-related matters, including taxes, legal requirements, and employee management. "There's taxes. There's legal stuff. There's employees," he stated.
Without AI, Shaw believes he would have faced significant hurdles. "Either consult people or just do a lot of research to try to find the answer to one question," he said, underscoring the time and expense that traditional methods would have entailed. AI, in his experience, has been a critical factor in his business's rapid growth.
Aaron Terrazas, an economist at Gusto, elaborated on the impact of AI. "You know, you think about a young startup in the past, having to hire lawyers is very expensive. Having to hire admins was a luxury," Terrazas explained. He noted that AI is now removing these traditional barriers for many new business owners, making essential services more attainable.
Gusto's survey, which polled 1,000 individuals who established businesses in 2025, revealed that a significant majority reported AI had made the business launch process either substantially faster or less costly. Terrazas characterized AI's role as an "accelerator rather than, you know, opening up brand-new opportunities."
The report also highlighted a generational difference in AI adoption for business creation. Over 70% of Gen Z entrepreneurs reported using AI in their business launch, a figure that significantly outpaces the just over half of Gen Xers who did the same. Shaw, a member of Gen Z, noted that using AI was a natural extension of his digital habits. "Obviously, when, like, you know, ChatGPT first came out, I was on that trend and jumped on that and was using it for – I don't know – anything, really," he shared.
Shaw's business has seen considerable success in its first 10 months. He now operates two coffee carts and has achieved six-figure revenues. His business caters to four to six events weekly, including corporate functions, graduation parties, church gatherings, and even weddings. AI has also assisted him in managing client communications across various platforms like text, Instagram, and email, allowing for tailored responses.
"So if I'm going to send them a DM, it's going to give me something a little bit shorter, you know, a little more to the point. If it's going to be doing an email, it's going to be a little bit longer, a little bit more formal. You know, it can throw emojis in there," Shaw described, illustrating how AI helps him adapt his communication style.
The broader question of whether AI is displacing jobs or fostering new employment opportunities remains complex. While Shaw has not directly hired an external lawyer or accountant, his business's expansion has led him to employ four part-time baristas to manage the increased demand. These roles offer flexible scheduling, accommodating various times of day and week.
Despite the technological assistance, Shaw remains deeply connected to the human element of his business. He particularly enjoys the face-to-face interactions at weekend pop-ups in downtown areas. "One of my favorite things is just people walking by, getting to meet people, and family and friends and strangers getting to come up and buy a coffee," he said.
Ultimately, the coffee served at Shaws Coffee Cart is still prepared by human hands, blending the efficiency of AI-driven business management with the personal touch of traditional service. The trend suggests that AI is not just a tool for automation but a significant enabler of entrepreneurial activity, particularly for a generation adept at harnessing its capabilities.
The Gusto report, released on May 14, 2026, surveyed 1,000 individuals who initiated businesses in the preceding year, 2025. The data underscores a significant shift in how new ventures are being established, with AI playing an increasingly central role in accelerating growth and reducing the financial and logistical burdens traditionally associated with entrepreneurship. This technological integration is empowering a new cohort of business owners, especially within Gen Z, to bring their ideas to market more swiftly and efficiently.
