Exclusive: SBA's Kelly Loeffler predicts AI will fuel Main Street growth

Artificial intelligence will fuel job creation on main streets across America, Small Business Administration administrator Kelly Loeffler predicted Tuesday at Axios' AM Live in Washington, D.C.

Why it matters: AI has both created — and destroyed — jobs, leaving a nuanced footprint on the market. What's clear is that it will reshape the way people work.

Driving the news: As compute power explodes, Loeffler contends the "biggest beneficiaries" will be small businesses, she told Axios' Mike Allen.

• The history-defining tech is a "huge leveler of the playing field for America," she said. But "if China wins" the AI arms race,"this is going to be really problematic for the entire country, but particularly for main streets."

Catch up quick: Loeffler, previously a Trump loyalist in the Senate, now sits atop an SBA facing deep funding cuts under the White House's proposed budget for fiscal year 2027.

• The National Small Business Association warned the cuts, if implemented, "could be very dramatic, resulting in higher costs for lending, fewer technical resources and greater difficulty for small businesses seeking assistance from the agency."
• But on Tuesday, Loeffler championed SBA's deregulatory, an onshoring agenda and access to capital for small businesses.
• "We're really reorienting the agency to be technology- and customer-driven as opposed to bureaucracy-driven," she said.

Zoom out: Small businesses employ nearly half of the American workforce, per the U.S. Chamber of Commerce, and are a major driver of economic growth.

• But small business optimism remains below its 52-year average, according to Bank of America's May analysis of small businesses and the April National Federation of Independent Business report.
• That sagging sentiment is consistent with falling profitability growth and concerns about inflation and the broader economic outlook, as higher gas prices have strained businesses and consumers alike.
• Still, Americans are filing paperwork to start new businesses at near-record rates.

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