Survey finds widespread use of generic tools like ChatGPT and Copilot, but only three in 10 small businesses are deploying customised AI solutions.
The Small Firms Association (SFA) has warned that a significant gap remains between basic AI usage and strategic adoption among Irish small businesses, despite growing use of artificial intelligence tools across the sector.
New research conducted by Amárach on behalf of the SFA found that 92% of small firms use generic, off-the-shelf AI tools such as ChatGPT and Microsoft Copilot. However, only 30% of companies surveyed are using customised AI models tailored specifically to their business needs.
“AI has the unmatched potential to dramatically boost productivity and lower overheads, but owners simply do not have the hours in the day, technical staff or finances to figure out how to deploy it strategically”
The survey also found progress in more advanced AI implementation. In 2026, 20% of small businesses surveyed said they are building or coding standalone in-house software, up from 10% last year. The proportion using customised AI models increased from 22% in 2025 to 30% this year.
Shallow AI adoption holds firms back
For companies actively using customised or strategic AI, the benefits are already becoming clear. The research found that 65% reported an immediate boost in business efficiency, while 45% said AI had improved the speed of service delivery to customers.
Technology usage across core business operations continues to expand. The survey found that 61% of businesses use AI for automating simple tasks, up from 56% last year, while 52% rely on AI for digital dashboards and analytics. The most common use of AI is the management of digital business files, with 65% of businesses using it for that purpose, compared with 40% in 2025.
However, barriers to adoption remain significant.
According to the research, 31% of companies cited a lack of technical expertise as the primary obstacle to adopting AI. A further 28% pointed to a lack of time to investigate the technology, while 17% said finance was the main challenge. All three figures have increased compared with the previous year.
The survey also found that 31% of small businesses have not started or investigated AI adoption for their business, up from 17% last year.
Commenting on the findings, SFA director David Broderick said many businesses remain focused on basic uses of AI.
“Small businesses are continuing to embrace off-the-shelf generic tools, mostly to use for basic administration and file storage. A significant majority of small businesses, however, have not yet embraced the development customised tech and building stand-alone software. Although more businesses are doing that more so compared to last year. Those businesses that have adopted more advanced AI systems have seen benefits in terms of efficiencies and cost.”
Broderick said rising business costs are making productivity-enhancing technologies increasingly important for SMEs.
“Small businesses are feeling the squeeze of spiralling operational costs. AI has the unmatched potential to dramatically boost productivity and lower overheads, but owners simply do not have the hours in the day, technical staff or finances to figure out how to deploy it strategically. If our small business community is going to survive alongside large corporate competitors, they cannot do it alone.”
The SFA is urging Government to use existing National Training Fund channels to help small businesses strengthen their digital capabilities and AI skills.
Broderick said: “The SFA once again is calling on the Government to utilise existing trusted, funding channels from the National Training Fund to address technical skill deficits among small businesses. AI can make huge gains for a small business’s productivity, but small business owners need assistance in identifying where those gains can be made for their specific needs.
“This operates very well when businesses get assistance through the SFA’s MentorsWork programme where experience mentors engage with owners on the specific company needs. Any unlocking of the National Training Fund should prioritise these types of existing funding channels that are established, effective as well as trusted. Speed of delivery and early impact is essential here.
“This needs to be done quickly so that our small firms do not fall behind. To protect Ireland’s broader competitiveness, we must transform our small firms from passive tech-users into active tech-innovators.”
The survey found AI adoption remains concentrated in low-risk operational areas. Sales and marketing content generation was the most common use case, cited by 63% of respondents, matching the proportion using AI for administration workflows. Data analytics was used by 43% of businesses.
Sector sentiment towards AI remains strongest in financial and professional services, where enthusiasm for AI reached 88%. Retail and hospitality continue to lag, with 38% of retailers and 41% of hospitality businesses reporting that they have not investigated AI use at all. Meanwhile, 31% of all respondents said they remain neutral or indifferent towards workplace AI implementation.
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