AI has given the small business underdogs the power to take on corporate giants

I recently found myself in the company of some remarkable startup founders, each one brimming with bold ideas, big dreams, and the kind of relentless drive that keeps the entrepreneurial spirit alive.

Listening to their stories, the highs and lows, the wins and roadblocks, was inspiring. 

Whether just starting out or deep into their journey, each founder carried a spark. It reminded me that greatness doesn’t have a set formula, it’s born from courage, creativity, and an unshakable belief in the possible. 

Maybe, just maybe, these founders, and countless others like them, are about to get the boost they’ve been waiting for. The hustle’s real, and it’s about to level up as AI revolutionises SMEs.

Understandably, the world is questioning the impact AI will have on our future.

Everywhere you look, the narrative seems to oscillate between excitement and existential dread. Headlines scream about job losses, AI overlords, and the unravelling of industries. But amidst the noise, let’s take a step back and ask a deeper question: are we so sure the business world we’re preserving is a perfect one?

Spoiler alert: it’s not.

Often referred to as the “engine room” of the economy, SMEs play a critical role in Australia’s economy and around the world, contributing significantly to employment and economic output. According to the ABS, SMEs comprise the vast majority of the 2.6 million actively trading businesses as of June 30, 2024, highlighting the importance of the small business sector to the Australian economy.

However, the sector is not without risks. A recent survey also found that 29% of SMEs claim they are at risk of insolvency if they lose a major client, highlighting the vulnerability of many small businesses to market fluctuations and client dependencies. 

A major factor behind these failures is the lack of marketing expertise. For most of these businesses, marketing is more of a guessing game than a strategic advantage. They spend on average, just 7% of their revenue on marketing, often out of necessity, not choice.

This isn’t because small business owners lack ambition or vision. It’s because they lack time, resources, and access to expert knowledge that’s historically been locked behind high paywalls or agency retainers. But here’s where AI changes the game.

AI for marketing

AI has the potential to democratise access to high-quality marketing, giving small businesses tools that were once only available to companies with deep pockets and dedicated teams. 

What if an independent bookstore in a small town could launch digital campaigns as sharp as a Fortune 500 company? What if a local baker could use AI to target her Instagram ads with laser precision, write compelling email newsletters, or even generate eye-catching visuals, all in a matter of minutes?

With AI-powered platforms, businesses can now create branded content, manage social media, analyse customer behaviour, optimise search rankings, and launch email campaigns, without needing a degree in data science or a massive marketing budget.

According to Verizon’s 2025 State of Small Business Survey, 38% of SMEs are already adopting AI to handle key functions like marketing, hiring, and customer service. And that number is growing fast.

And what would be the economic ripple effect if more SMEs didn’t just survive but thrived?

First, more successful SMEs means more jobs. A thriving local restaurant might hire five more servers. A growing e-commerce boutique might bring on a social media manager and a warehouse coordinator. Scale that up across the millions of small businesses in Australia and we’re looking at significant job creation and lower unemployment rates.

Second, it sparks economic decentralisation. Today, the economic landscape is top-heavy. Mega-corporations dominate entire industries, making it harder for challengers to rise. If AI levels the playing field and SMEs start winning more market share, we could see a shift in power from monopolies to a more distributed and resilient economy.

Third, it fosters innovation and diversity. Big companies tend to play it safe; they protect their existing markets.

But small businesses? They’re the dreamers and disruptors, they take risks, they experiment, and they bring fresh ideas into the world.

More of them succeeding means more creativity in the marketplace. Imagine a business environment where instead of the same five fashion brands dominating your feed, you’re discovering unique clothing lines from across the globe, each with a story and purpose.

The benefits of AI-powered SME growth won’t just show up in economic reports, they’ll transform our everyday lives:

• More choice: As competition grows, so does variety. Consumers gain access to a wider array of products and services, often more tailored, ethical, or locally sourced than what the major retailers offer.
• Lower prices: When small businesses can compete effectively, it drives down prices and improves value across the board.
• Stronger communities: Thriving local businesses reinvest in their communities. They sponsor sports teams, donate to schools, and keep communities alive. When they grow, so does the community.
• Increased accessibility: From rural entrepreneurs to minority-owned start-ups, AI can eliminate traditional barriers to entry. It doesn’t care about geography or legacy it simply just needs an internet connection.

For too long, big businesses have had the upper hand, thanks to deep budgets, dedicated teams, and economies of scale. But AI is creating a seismic shift. The corner florist can now compete with a national flower delivery service. The artisan coffee roaster can build an audience outside their post code they just need the right AI tools.

This is the promise AI holds: a business landscape where economic power isn’t hoarded at the top but distributed more equitably. Where the best ideas win, not just the biggest budgets and where challenger brands get their moment in the spotlight, and consumers benefit from the rich diversity of products, services, and experiences that follow.

Sure, the AI revolution brings challenges. But let’s not lose sight of the unprecedented opportunity in front of us. We’re not protecting a perfect system; we’re stepping into a new one that could empower so many SMEs to not only survive but thrive.

Let’s stop obsessing over the perceived losses brought by the rise of AI and start talking about what we all stand to gain: a more diverse range of jobs, more innovation, stronger communities, fairer competition, and a richer, more diverse world. If that’s what AI helps us build, then maybe it’s not something to fear, but something to welcome.  That is a future worth building.

• John Gutteridge is CEO & founder of Soffiah.ai and Wondrous Group.