Americans filed 5.6 million new business applications in 2025, a figure Citadel Securities put at the center of a July research note titled “AI-merican Exceptionalism,” which pegs the running increase at 24% since ChatGPT shipped. The layoff cycle has been getting the headlines. The formation cycle is the story underneath it.

Fresh U.S. Census Bureau data published this month sharpens the picture. June’s numbers imply 29,700 new businesses forming monthly within a year, 17% above the year-ago projection. Bloomberg’s Michael Sasso, working from the same Census release, found that AI-friendly professional services (architects, lawyers, advertisers, consultants) are on track for more than 5,000 formations per month, a record in data going back to 2004 and up 24% year over year.

Citadel’s read is structural: AI is lowering the minimum efficient scale of a business. Their tell is a small one, easily missed. In Q1 2023, one quarter after ChatGPT’s release, the median seed-stage startup shrank from five employees to four. Small number, large implication.

The archetype is already in the wild. Matthew Gallagher launched Medvi, a GLP-1 telehealth outfit, from his Los Angeles home in September 2024 with $20,000 and no employees. PYMNTS reports the company did $401 million in sales in its first full year, served 250,000 customers, and cleared a 16.2% net margin, run on a stack that reads like a 2025 solo-founder starter pack: ChatGPT, Claude, Midjourney, ElevenLabs, and workflow layers like LemonLime that stitch the models into something resembling a back office.

Forbes contributor Lisa Curtis notes that the number of people listing “founder” on LinkedIn is up 69% year over year, which is either a leading indicator or a vanity metric depending on your priors. Bloomberg, for its part, hedges: “many of these startups could fail quickly, as AI helps dubious business plans move forward — a new wrinkle on the ‘AI slop’ that’s all over social media.”

Both things can be true. The 2004 record in professional services isn’t slop. It’s a category-defining shift in what one person plus a laptop can plausibly incorporate.

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