A recent NPR article highlights that a significant milestone was reached, this month. For the first time ever, Gen Z founders initiated more new businesses in the United States than Baby Boomers did. That is the headline from Gusto’s sixth annual New Business Formation Report, released May 14 and quickly picked up by NPR labor correspondent Andrea Hsu in a short All Things Considered segment. Built on a survey of 1,051 founders who launched in 2025, the report paints a portrait of an entrepreneurial generation that is younger, more diverse, and noticeably more comfortable with AI than any cohort before it.
The most quoted number is the headline one: 60 percent of 2025 founders used AI to launch their business, nearly three times the 21 percent who said the same just three years earlier. The story behind that number is what makes the report worth a longer look.
Below are key highlights from NPR article:
- A generational handoff. Gen Z accounted for 9 percent of new businesses started in 2025, compared with 5 percent for Boomers. Gusto’s economists frame this as a “generational crossing” that signals a meaningful shift in who is building the American economy.
- AI as a launch tool, not just an operational one. Beyond the 60 percent who used AI to launch, in-business AI adoption has more than doubled across every major sector, rising from 21 percent in 2023 to 44 percent today. The technology has moved from optional experiment to default scaffolding.
- Gen Z is leading the charge. Seventy-one percent of Gen Z founders used AI to launch their business, compared with 42 percent of Boomers. More tellingly, Gen Z entrepreneurs were five times more likely than Boomers to say they probably would not have started their business at all without AI.
- AI does not appear to be killing jobs at these companies. Businesses employing AI in their operations are more inclined to plan for headcount growth in 2026, with 49 percent of them doing so compared to 41 percent of non-AI users. Additionally, the overall hiring intent reached a three-year high, with 44 percent of businesses expressing this intention. Furthermore, AI-using founders were twice as likely to secure venture or angel funding.
- A more diverse founder pool. More than one-third of new founders (37 percent) are first- or second-generation immigrants. Women led 69 percent of new Black-owned businesses for the third consecutive year, initiated 51 percent of new AAPI-owned businesses, and constituted 47 percent of Gen Z-owned ventures, an increase from 38 percent the previous year.
The overarching narrative is provided by Gusto senior economist Nich Tremper, who informed the press that the obstacles of capital, expertise, and time have historically prevented aspiring founders from participating in the business world. Tremper emphasized that AI is gradually diminishing these barriers. The NPR segment further elaborates on this point, suggesting that this is not merely a tale of a trendy technological advancement, but rather a subtle structural transformation in the small business economy. Notably, a generation that has grown up with chatbots in their pockets is emerging as the first to benefit from this shift.
Acknowledgement: This summary was generated using AI writing tools as part of my AI Explorations process. For more information, please refer to the original article and report listed below.