Tools & Platforms
Early-Stage Startups Leverage AI for Productivity, Growth and Hiring
For early-stage startup founders, uncertainty is just part of the daily grind. What sets them apart is how they’re turning challenges into opportunities to rethink how businesses grow and compete.
A recent survey from Mercury, a financial technology company, asked 1,500 U.S. entrepreneurs about how they are navigating capital, technology adoption, operational costs and strategies for funding and hiring. The results reveal a community of founders who are resilient, optimistic and eager to adopt new technologies.
One of the clearest patterns to emerge is the role of AI. Rather than a luxury, AI has become a central tool for startups, helping them streamline operations, boost productivity and make smarter decisions, all while sustaining growth even in an unpredictable economy.
Mercury’s data reveals a striking trend: Despite global headwinds, the survey found that 87 percent of entrepreneurs reported their confidence in their business’s financial prospects had improved compared to 2024.
AI Powers Growth
This confidence appears to be intrinsically linked to their adoption of AI. Companies that have invested significantly in AI adoption had a 93 percent positive outlook about their financial prospects, versus 71 percent for non-AI adopters.
Founders using AI reported a significantly higher return on investment (ROI) compared to “traditional” alternatives, with 83 percent saying it had a somewhat or significantly higher ROI.
This ROI is not just a statistical blip; it is driving a fundamental shift in how startups allocate resources. More than half of all companies surveyed—55 percent—are actively reallocating their budgets from traditional tools to AI technologies.
This shift is even more pronounced among larger startups and more established companies, demonstrating a widespread strategic commitment to AI investment.
The funding landscape also reflects this shift toward AI. “Venture capital data shows that investment in AI-focused startups is responsible for a large and growing share of total venture capital funding, amid otherwise very challenging startup funding circumstances,” John Dearie, president of the Center for American Entrepreneurship (CAE), told Newsweek. This suggests that investors, like founders, increasingly view AI adoption not as optional but as essential to long-term growth.
“Companies of all sizes are using AI to become more productive by automating costly data and labor-intensive tasks,” Dearie said.
Hiring Gains From AI
One of the most compelling findings of the survey is the relationship between AI adoption and hiring. While common wisdom might suggest that automation leads to job losses, the opposite appears to be true in the startup ecosystem.
“Remarkably,” said Dearie, “startups using AI report that AI tools are leading to more hiring, not less.”
He continued: “This finding, of course, runs counter to the narrative that AI will eliminate jobs. But this insight is actually consistent with a major takeaway from our recent May 6th roundtable with AI-focused entrepreneurs in Houston. Participants told us that in addition to using AI to automate certain aspects of their businesses — financial analysis, record-keeping, project management, employee evaluation, more precise advertising, etc — many startups are using AI to analyze their customer relationships in order to identify additional needs and problems of their customers that startups can help address. In other words, many startups are using AI to extend and deepen their relationship with customers and clients — with clear implications for additional hiring.”
This is particularly evident in the use of contract workers. Companies with significant AI adoption were nearly four times higher in their reliance on contractors, with 45 percent of companies with significant AI adoption saying they are “very reliant” on contractors, versus 12 percent for non-adopters.
Mercury spokesperson Celeste Carswell told Newsweek these AI-forward companies “tend to deploy contractors in growth-driving roles like sales and marketing, while non-adopters lean toward operational and support functions.”
This data suggests that startups are leveraging AI to scale flexibly and globally, with 38 percent of AI adopters using contractors to access international talent, a rate more than double that of non-adopters.
AI Spreads Beyond Tech
The survey also reveals how widespread AI adoption has become. While tech companies were the most likely to be shifting their budgets toward AI (72 percent), at least 50 percent of respondents in every other industry said the same. This signals that AI investment isn’t limited to Silicon Valley, it’s a global and cross-industry trend.
Looking ahead, some industries may feel AI’s impact more than others. “In my view, healthcare — both with regard to medical research and development, and the efficiency of health care delivery — is an industry particularly ripe for AI-driven disruption and greater efficiency,” Dearie told Newsweek.
“That’s great news for lots of reasons, not the least of which is the national debt problem — Medicare and Medicaid are huge drivers of the federal budget and our national debt.”
Barriers Slow Some Founders
However, a resource gap remains. According to the data, older and larger startups are more likely to shift budgets toward AI: 62 percent of companies with 100-plus employees and 61 percent of companies aged five or more years reported reallocating resources toward AI tools. In contrast, solo founders were significantly less likely to do so, highlighting how limited runway and resources can constrain AI adoption even when interest is high.
But adopting AI is not without its hurdles. Dearie emphasized how several business owners noted how difficult it can be to keep pace with AI’s rapid evolution.
“Participants reported that AI is developing so quickly that as busy business owners, they struggle to keep up,” Dearie said. Many reported feeling “behind the curve” when it came to evaluating and incorporating new tools, while others highlighted challenges around interpreting model outputs and ensuring data security.
“Business owners know they need to be more digitally active and savvy, but need help choosing, training on, and effectively incorporating AI tools,” he added.
Policy Questions Ahead
Ultimately, the Mercury survey offers a powerful narrative of adaptation. Early-stage companies are not waiting for the economic winds to change; they are harnessing the power of new technology to forge their own path.
As Carswell concluded, “Nearly half of working Americans are employed by small businesses, making early-stage companies a critical lens into how AI adoption is impacting the economy.”
Still, the pace of adoption raises policy questions. Dearie argued that Congress should clarify how small businesses can responsibly finance digital tools like AI. He pointed to bipartisan legislation, like the Small Business Technological Advancement Act, which would explicitly allow startups to use SBA-backed loans to pay for AI tools and training.
“Entrepreneurs need clear rules of the road – most importantly, a consistent national standard with regard to data privacy and security, and a national regulatory architecture for the development and application of AI,” he said. Bad or hasty policy, he warned, could stifle innovation just as it begins to accelerate.
It is clear that the entrepreneurial landscape is in flux, and the ability to leverage tools like AI and embrace flexible strategies will be the key to success for the next generation of businesses.
“The successful incorporation of AI by entrepreneurs to grow more efficiently and to create additional jobs is a very bullish signal for the U.S. economy,” said Dearie.
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Dot, an AI companion app that aimed to be a friend and confidante, is shutting down, the company announced on Friday. On a message published on its website, the startup behind Dot, New Computer, said that the product will remain operational until October 5, giving users time to download their data.
Launched in 2024 by co-founders Sam Whitmore and former Apple designer Jason Yuan, Dot waded into what’s now become a more controversial area for AI chatbots. The app they created was described as an AI “friend and companion,” which would become more personalized to you and your interests over time in order to offer advice, sympathy, and emotional support.
As Yuan explained at the time, Dot was “facilitating a relationship with my inner self. It’s like a living mirror of myself, so to speak,” he said.
However, this may not be a safe area to invest in as a smaller startup.
As AI technology has become more mainstream, there have been reports of how emotionally vulnerable people have been led into delusional thinking by AI chatbots like ChatGPT. This has led to a phenomenon described as “AI psychosis,” resulting from how the scyophantic chatbots reinforce a user’s confused or paranoid beliefs.
As Dot shuts down, AI chatbot apps broadly have been falling under increased scrutiny over safety concerns. OpenAI is currently being sued by the parents of a California teenager who took his life after messaging with ChatGPT about his suicidal thoughts. Other stories have highlighted how AI companion apps can reinforce unhealthy behaviors in users who are mentally unwell. This week, two U.S. attorneys general sent a letter to OpenAI over safety concerns.
Dot’s makers didn’t address whether these types of issues had weighed on the founders’ minds. Instead, the brief post only notes that Whitmore and Yuan’s shared “Northstar” had diverged.
“Rather than compromise either vision, we’ve decided to go our separate ways and wind down operations,” the post explains.
“We want to be sensitive to the fact that this means many of you will lose access to a friend, confidante, and companion, which is somewhat unprecedented in software, so we want to give you some time to say goodbye. Dot will remain operational until October 5, and until then you can download all of your data by navigating to the settings page and tapping ‘Request your data.’”
The post suggests the startup had “hundreds of thousands” of users, but data from app intelligence provider Appfigures sees only 24,500 lifetime downloads on iOS since launching in June 2024. (There was no Android version.)
Tools & Platforms
OpenAI Unveils Jobs Platform, Certification Program to Match Workers With AI-Era Employment
- OpenAI is launching the OpenAI Jobs Platform, a marketplace designed to connect AI-skilled workers with employers, as part of its effort to address workforce disruption and create new opportunities as AI adoption accelerates.
- The platform will feature candidates across expertise levels and support hiring for large companies, small businesses, and governments, with early partners including the Texas Association of Business, Walmart, John Deere, BCG, Accenture, Indeed, and state governments.
- Complementing the platform, OpenAI will expand its Academy with new certification programs available directly in ChatGPT, aiming to certify 10 million Americans by 2030, positioning AI fluency as a critical workforce credential.
OpenAI is rolling out a jobs platform and certification program designed to connect AI-skilled workers with employers, part of a broader push to address workplace disruption as artificial intelligence spreads across industries, CEO of Applications Fidji Simo announced in a blog post.
The OpenAI Jobs Platform will serve as a marketplace for businesses seeking employees fluent in AI tools and for workers looking to apply those skills. The platform, which will feature candidates at multiple levels of expertise, is intended to streamline hiring for large companies, local businesses, and government agencies. Groups including the Texas Association of Business plan to use the system to link thousands of employers with AI-trained talent, according to Simo.
Other partners include John Deere, Boston Consulting Group, Accenture, Indeed, and several state governments, the company said.
The move comes as employers increasingly cite AI expertise as a critical requirement for future competitiveness. OpenAI said it will complement the platform with a certification program to validate workers’ AI skills. The certifications build on the company’s OpenAI Academy, a free online training hub launched earlier this year that has already drawn more than two million participants. The expanded program will allow users to prepare for and earn certifications directly in ChatGPT, from basic AI fluency to advanced prompt engineering.
The company aims to certify 10 million Americans by 2030. Walmart, the world’s largest private employer, is among the first partners, the company pointed out.
“At Walmart, we know the future of retail won’t be defined by technology alone—it will be defined by people who know how to use it,” John Furner, CEO, Walmart U.S., said in a statement. “By bringing AI training directly to our associates, we’re putting the most powerful technology of our time in their hands—giving them the skills to rewrite the playbook and shape the future of retail.”
OpenAI indicated its initiatives highlight the dual nature of AI’s economic impact: the technology is expected to generate new opportunities while disrupting traditional roles. Jobs will look different, companies will have to adapt, and all of us—from shift workers to CEOs—will have to learn how to work in new ways,” Simo wrote.
She pointed out the launch aligns with the White House’s AI literacy campaign and as they move forward, the initiatives will focus on the needs of employees and employers.
“It’s all about being intentional about the kind of future we want to build,” Simo wrote. “If we want to put more power into the hands of more people, not just a fortunate few, we need to help everyone, at every level, take advantage of the opportunities that come with AI. We’ve still got a long way to go, but this is an important step in the right direction.”
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