Only 31% of small-business AI users report that the technology has produced higher sales, according to a New York Fed analysis published October 8 on Liberty Street Economics. The underlying survey, from the Federal Reserve Banks’ 2026 Report on Employer Firms, polled 5,248 employer firms, and the gap it exposes isn’t about adoption anymore. It’s about conversion.
Adoption is already mainstream. Will Aarons and Asani Sarkar, the NY Fed researchers who wrote the post, report that 46% of firms with at least one employee say the business or its employees are using AI tools, and another 15% plan to adopt within twelve months. Among current users, 63% call AI somewhat or very important to production, and 51% have partially or fully integrated it into business processes. Writing and marketing dominate actual use: 83% of AI-using firms cite them as top tasks.
Then the numbers bend. Productivity gains show up for 71% of AI-using firms. Sales gains show up for 31%. That leaves 69% of adopters, roughly two-thirds, who’ve plugged AI into their operations without yet seeing revenue move.
The optimism, meanwhile, is enormous. AI users post a 48-point net expectation of revenue growth over the next year, against 21 points for non-users, more than double. TechRadar Pro, summarizing the Liberty Street post on October 9, framed it bluntly: “Expectations vs. reality gap shows only 31% have increased sales so far.”
The most analytically interesting finding is where the optimism concentrates. Aarons and Sarkar document a 16-percentage-point higher net revenue expectation among AI users who report technology-related operational challenges, websites, social media, ecommerce, compared with AI users who don’t. “AI may be helping some small businesses overcome specific operational or technical constraints that limit revenue generation,” they write. Reaching customers and growing sales was the single most commonly cited operational challenge in the broader report, ahead of hiring.
A parallel SBE Council “Small Business Check Up” survey, also out October 8, found 28% of owners whose financial performance improved or held steady credited “adopting technologies such as AI” as a contributing factor. Useful, not transformative.
The read-through, especially for 5-to-30-person firms, is that generic AI tools raise productivity floors but don’t automatically produce customers. We’ve covered the downstream of this before: small businesses cutting marketing-agency spend after adopting AI, and the parallel finding that AI-using small firms have already trimmed broader marketing budgets. Spend is coming out. Sales, for most, aren’t going in.
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The Fed data doesn’t say AI isn’t working. It says operating a tool and acquiring a customer are different jobs.
Sources
- https://libertystreeteconomics.newyorkfed.org/2026/10/ai-adoption-and-employment-expectations-evidence-from-a-survey-of-small-business-owners/
- https://www.techradar.com/pro/small-businesses-that-adopt-ai-are-more-optimistic-about-growth-revenue-and-employment
- https://www.fedsmallbusiness.org/reports/survey/2026/2026-report-on-employer-firms
- https://sbecouncil.org/2026/10/08/new-small-business-check-up-survey-main-street-businesses-are-powering-through-2026/
- https://fedinprint.org/item/fednls/103899