Small businesses hired AI to save money. Now they're budgeting for its bad habits.

Small businesses are increasingly adopting AI for cost-saving and efficiency, with 58% using it in 2025 compared to 23% in 2023. While AI helped companies like Sparkles Homes and Flint Avenue Marketing reduce costs and automate tasks, it also caused unexpected expenses and awkward errors, such as AI-generated emails and over-apologetic phone responses. Small businesses are now budgeting more for AI, with median costs rising to $21 per employee in 2025.