New business applications hit a record 5.7 million last year, fueled by AI and remote work. The trend continues into 2025, with implications for payroll and services stocks.
Alpha Score of 40 reflects weak overall profile with weak momentum, poor value, moderate quality, weak sentiment.
Americans filed 5.7 million applications to start new businesses last year, the highest tally in the two decades the Census Bureau has tracked the data. The surge, which began during the pandemic, has accelerated through the first half of this year, the agency said.
A confluence of factors drove the boom. Mass layoffs and the shift to remote work lowered the cost of entry, while the rise of generative A.I. made it cheaper to launch ventures, according to a recent paper from economists at the University of British Columbia and the Stockholm School of Economics. The study found that A.I. is “spurring entrepreneurial activity” in the United States, both by creating new business models and by reducing startup costs.
“A.I. tools can do very many different things very well,” said Jan Bena, an associate professor at the University of British Columbia and one of the paper’s authors. “That’s the reason why you see so much entry.”
Nearly 60% of founders on Gusto, a small-business payroll platform, said they used A.I. after starting their companies last year, and half said the technology cut costs and sped up operations, the firm reported.
The New York Times, which reported the story, carries an Alpha Score of 54/100 with a Mixed label in the Communication Services sector.
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