Citadel Securities says AI is the latest reason not to bet against the United States.

The firm examined the impact of the AI ​​boom on American business and productivity in a note for the July 4 holiday. He said new technology is giving the United States a key economic advantage by driving the reduction of barriers for small businesses in different sectors and fueling a new wave of entrepreneurship.

“In effect, AI allows companies to access economies of scale before they have fully scaled, bundling capabilities across functions and lowering the production threshold at which expansion becomes economical,” wrote macro strategist Frank Flight. “Never bet against the United States.”

Economists such as Mohamed El-Erian have asserted that American exceptionalism faces significant challenges as market headwinds shift, while others have suggested that the United States has already begun to lose its advantage over other leading economies.

But Citadel Securities argues that, to the contrary, AI is already helping the United States maintain its place as a global economic superpower by giving rise to a booming business economy marked by a culture of hustle and innovation. As Flight noted, America’s small business sector generates nearly 40% of economic output.

“AI can deliver its biggest dividend by aggravating America’s hustle culture: reducing the cost of company formation, increasing founder leverage, and turning the country’s instinct for innovation into new economic activity,” Flight added.

Much of the recent debate about AI has focused on the stock market and the amazing construction of infrastructure like data centers. But Flight added that it might be time to have a new conversation.

“Until now, the topic of AI has been framed around cutting-edge labs, hyperscalers, and bottlenecks in computing,” he said. “We believe an equally powerful approach is what AI does for the builders, founders and small businesses that power such a large part of the economy.”

Historically, small businesses have struggled with limited staff and resources, particularly outside of major metropolitan areas. Now, as Flight points out, AI is allowing business owners to access economies of scale and expand in ways that allow them to compete with larger peers.

He acknowledged that this may mean AI automates certain tasks. But while that may result in job losses, Flight added that it is also likely to create new business opportunities that ultimately create more jobs as companies grow and explore new areas.

To illustrate this, he cited the example of Jevons’ paradox, an economic principle that holds that innovative new technology creates more efficiency and ultimately leads to the creation of more jobs. Apollo chief economist Torsten Sløk recently made the same argument, predicting that AI would lead to a labor market boom, rather than the job destruction that many feared.