AI can create start-ups, just not good ones

The U.S. Census Bureau reported 531,423 business applications in June, the highest sustained rate in 22 years, but researchers caution that AI-driven entrepreneurship may be overstated. Jorge Guzman of Columbia Business School and Scott Stern of MIT analyzed 28 million registrations across 32 states and found that many applications never lead to actual hiring, suggesting the boom is in filings, not viable startups.

The U.S. Census Bureau said July 9 that it received 531,423 business applications in June on a seasonally adjusted basis, capping what was for the first half of the year the highest sustained rate of such applications in the 22-year history of the series. The surge is being interpreted as the first real evidence of an artificial intelligence AI -driven entrepreneurial boom. Not necessarily. Artificial intelligence has made the mechanics of starting a business nearly free, and the mechanics were never the barrier that mattered. When you apply for an employer identification number, the Internal Revenue Service asks when you expect to start paying wages. It is one line on a form, and you can leave it blank. That’s happening more often, and it matters more than the total number of forms submitted. Through the 2010s the rate of new business formations was falling, triggering worries that the country’s dynamism was fading. Jorge Guzman of Columbia Business School and Scott Stern of MIT looked for a better measure. They took 28 million business registrations across 32 states covering 81