Small Business Administration chief Kelly Loeffler predicted Tuesday that artificial intelligence will spark job growth across American small businesses, but only if the United States maintains its technological edge over rivals like China.
Speaking at Axios' AM Live in Washington, Loeffler cast AI as a potential equalizer for smaller operators competing against larger corporations. The technology represents "a huge leveler of the playing field for America," she told the audience. But she warned that losing the AI competition internationally could devastate local economies. "If China wins" the race for AI dominance, "this is going to be really problematic for the entire country, but particularly for main streets," she said.
The SBA administrator's optimistic framing comes as her agency faces significant budget pressures under the Trump administration. The proposed fiscal 2027 budget includes deep cuts to the SBA, prompting warnings from the National Small Business Association that the reductions could lead to higher lending costs, fewer technical resources, and reduced assistance for business owners seeking help.
Despite the funding headwinds, Loeffler emphasized the SBA's shift toward a modernized approach. "We're really reorienting the agency to be technology- and customer-driven as opposed to bureaucracy-driven," she said. Her priorities include deregulation, onshoring initiatives, and expanded access to capital for small businesses.
The focus on small business prosperity reflects their outsized economic importance. These companies employ nearly half the American workforce and drive substantial economic growth, according to the U.S. Chamber of Commerce. Yet sentiment among small business owners remains depressed. Recent surveys show optimism falling well below its 52-year average, with concerns about inflation, gas prices, and the broader economic outlook weighing on profitability.
One bright spot: Americans are filing new business formation paperwork at nearly record levels, suggesting underlying entrepreneurial energy despite the gloomy sentiment among existing owners.
Author James Rodriguez: "Loeffler's AI optimism rings hollow when the agency she runs is getting gutted by her own administration's budget ax."
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