AI is driving big productiveness good points for giant firms whereas small firms get left behind

Synthetic intelligence is widening the productiveness hole between massive and small firms, lifting up larger corporations which are capable of successfully scale the expertise and reduce prices tie to human employees.

Massive-cap firms are seeing regular AI-related productiveness good points because the launch of OpenAI’s ChatGPT mannequin in 2022 when it comes to their actual income per employee, based on Wells Fargo evaluation. Small-cap names are witnessing a decline over the identical interval, in the meantime, the agency discovered.

“Whereas productiveness for the S&P 500 has soared 5.5% since ChatGPT, it is down 12.3% for the Russell 2000,” Wells Fargo fairness strategist Ohsung Kwon wrote in current be aware to shoppers. “We see different examples of diverging tendencies in shopper, industrial, and monetary markets.”

Breakthrough developments in AI this yr have led main firms like Amazon to notably go all-in on the expertise, discovering methods to eradicate human roles that may be changed by AI machines.

The efficiency of the S&P 500 versus the Russell 2000 small-cap index replicate this divergence in productiveness good points. The broad market index is up 74% since ChatGPT’s 2022 launch, whereas the Russell is simply up 39%.

The largest U.S. firms have been internally deploying AI instruments over the previous few years to enhance their productiveness, provide chains and, in some circumstances, reduce headcount. A World Financial Discussion board survey revealed in the beginning of 2025 discovered that roughly 40% of firms around the globe anticipate to cut back their workforces over the subsequent 5 years in roles the place AI can automate duties.

Layoffs this yr have been on the rise with a number of big-name firms, together with Goal, Meta, Starbucks, Oracle, Microsoft and UPS, having introduced important, and generally historic, cuts to their whole headcount. Corporations have largely cited efforts to streamline operations and development technique as causes for cuts, however many are nodding to AI as a part of the rationale that human employee roles will be axed now or sooner or later.

For one, Amazon has been a frontrunner in robotic deployment throughout its services, which the e-commerce big has mentioned is bettering prices and supply occasions. The New York Instances reported in October that Amazon executives imagine the corporate is on observe to interchange greater than half one million jobs with robots, which they imagine will save about 30 cents on every merchandise Amazon selects, packs and delivers to clients. Morgan Stanley believes Amazon’s robotics efforts can save the corporate between $2 billion and $4 billion by 2027.

Klarna, which has been among the many most clear in how AI is affecting its headcount, has shrunk its workforce by about 40%, partially resulting from its AI investments. CrowdStrike in Could introduced cuts to five% of the corporate’s international workforce, citing AI efficiencies and saying that the expertise “flattens our hiring curve.” IBM’s CEO has forecasted 30% of non-customer-facing roles to be reduce by 2028 and instructed the Wall Road Journal earlier this yr that AI chatbots have changed 200 HR staff, liberating up investments to rent extra individuals in gross sales and programming.

Palo Alto Networks, Walmart and McDonald’s are different firms which have notably been leveraging AI in ways in which analysts anticipate will enhance margins, we beforehand reported.

A September Intuit QuickBooks Small Enterprise Insights survey of 5,000 small companies in US, Canada, the UK, and Australia revealed that 68% of companies have built-in AI into their each day operations, with roughly two-thirds reporting a rise in productiveness.

“The numbers do not lie,” Wells Fargo’s Kwon mentioned in his report.