Can local businesses compete in the AI age?

Deepak Chopra once said, “All great changes are preceded by chaos.” A few years ago I wrote in this space about whether local businesses could compete in the digital age. I urged owners to upgrade their websites, check their Google listings and answer every email. That advice still matters. But I must be honest, the ground has shifted again, and this time it is moving faster than anything I have seen.

Welcome to the AI age.  Consider how quickly this arrived. A few years ago, most of us had never heard of ChatGPT. Last October, its maker reported more than 800 million people using it every week. That is not a fad. That is a new front door to commerce, and many of our local businesses have not noticed the door is now open.

Here is the number that should get every Main Street owner’s attention. A year ago, about 6% of American consumers said they used ChatGPT or similar AI tools to find local businesses. This year, that figure jumped to 45%. Nearly half of your potential customers are now asking a machine where to eat, who to call about a leaky roof, or which shop carries what they need. If the machine does not know you, it cannot recommend you.

Online shopping tells the same story. During the 2025 holiday season, traffic arriving at American retail websites from AI tools grew by roughly 693% over the year before. Meanwhile, when Google places an AI summary at the top of a search, people click through to a website about 8% of the time, compared with about 15% when no summary appears. The old playbook of building a website and hoping people find it is losing power.

Now, the good news. Small businesses are not standing still. The U.S. Chamber of Commerce found that 58% of small businesses used generative AI in 2025, up from just 23% two years earlier. Better yet, 82% of those businesses using AI grew their workforce over the past year. For all the talk of robots taking jobs, the businesses using these tools are hiring.

But there is a worrisome gap. Census Bureau data shows about 37% of firms with 250 or more employees use AI to produce their goods and services, while fewer than 20% of firms with four or fewer employees do. Worse, use climbed among larger firms between December and May but stayed flat among the smallest. Big box chains and national franchises have entire departments working on this. The family hardware store has the owner, working late, wondering where to even start.

If that describes you, you are not behind because you lack talent or grit. You are behind because you have been busy running a business, keeping the lights on and taking care of your people. That is honorable work. A recent survey of more than 1,200 small business owners found that 76% use AI in some form, yet only 14% have it built into their core operations, and 73% said they would benefit from more training and support. Your neighbors are wrestling with the same questions you are.

What I will not do is sugarcoat the stakes. In the digital age, businesses that ignored the internet faded slowly. In the AI age, the fading will happen faster, because the tools customers use to choose are changing in months, not decades. Reviews matter more than ever, too. About 82% of consumers say they read summaries of reviews written by AI. Whatever your customers have said about you is being boiled down into a few sentences for every new prospect.

Here is the bright side for Main Street. AI tools work from what they can find. Owners who keep accurate hours, current photos, fresh reviews and clear descriptions of what they sell give these systems something real to work with. Your authenticity, your local knowledge and your personal service are exactly what a national chain cannot fake. AI can help you write the newsletter, answer the late-night question and draft the social post, freeing you to take care of people face to face.

So here is your assignment. In the next 24 hours, open two or three free AI assistants, such as ChatGPT, Claude, or Google Gemini and type what a customer would ask: “best place for [what you sell] near [your town].” See if you show up. If you do not, update your online listings tomorrow.  The passive will be left behind. Let’s make sure our communities and businesses are not.

John A. Newby, a Chamber CEO, Publisher & Media Executive, Business Owner, Consultant & International Speaker is the author of the “Building Main Street, Not Wall Street” a column dedicated to helping local businesses & communities build stronger foundations allowing them to thrive in a world where local is lost to Wall Street interests. His email is john@truly-local.org