Citadel Securities: AI Is Supercharging American Small Business, Not Killing It

Citadel Securities macro strategist Frank Flight published a July 4th note arguing that AI represents a powerful new tailwind for American economic dominance — not through Wall Street or Silicon Valley, but through the small businesses that generate nearly 40% of U.S. economic output. The core argument: AI allows small businesses to access economies of scale before they've actually scaled, compressing the resource gap between a two-person startup and a large corporation.

Flight's framing cuts against the dominant AI narrative, which has focused almost entirely on frontier labs, hyperscalers like Microsoft and Google, and the trillion-dollar buildout of data centers. Instead, he argues the more consequential story is what AI does for founders and small-business owners — lowering the cost of starting a business, expanding what a single founder can accomplish, and turbocharging what he calls America's 'hustle culture.'

The note lands amid a genuine debate about American economic exceptionalism. Economists like Mohamed El-Erian have warned that the U.S. edge is eroding amid shifting market dynamics, but Citadel Securities pushes back hard, contending that AI compounds rather than corrodes the structural advantages America already holds in entrepreneurship and innovation.

On jobs, Flight invokes Jevons Paradox — the economic principle holding that efficiency-boosting technologies ultimately create more demand and more jobs, not fewer. Apollo's chief economist Torsten Sløk has made a similar call, predicting AI will trigger a labor-market boom rather than the mass displacement many fear. Flight acknowledges automation will eliminate some tasks, but frames that as a precondition for business growth that generates new roles downstream.