A new report from Menlo Ventures suggests artificial intelligence is no longer niche among American consumers. The 2025 State of Consumer AI survey, based on feedback from 5,000 U.S. adults, found that 61% now use AI, and nearly one in five rely on it daily.
Menlo Says Real AI Innovation Still Has Room to Grow
According to Menlo Ventures partner Shawn Carolan, consumer interaction with AI has yet to reach its full potential. “The fact that more than half of Americans already use AI is remarkable, especially considering most are just using it for quick, simple tasks.”
He added, “The biggest opportunity lies ahead when AI handles complex jobs from start to finish. … That’s the promise: less drudgery, more living.”
Millennials and Students Drive AI Adoption Rates
Demographic trends show that AI adoption varies sharply across age and lifestyle groups. Millennials are the most active daily users, with 24% reporting everyday engagement with AI tools.
Adult students showed the highest overall adoption, with 85% having used AI. Working adults are also using technology, with three-quarters saying they’ve interacted with AI.
Baby Boomers, while slower to adopt, still show notable interest—45% report having used AI, and 11% use it daily. Parents are significantly more engaged than non-parents, using AI at nearly double the daily rate (29% vs. 15%).
Menlo Highlights Gap Between AI Usage and Monetisation
Widespread AI adoption has not translated into broad consumer spending. According to the survey, only 3% of AI users currently pay for any AI services.
Total spending stands at $12 billion, suggesting limited monetisation and significant room for growth. Menlo Ventures sees major entrepreneurial potential in bridging this gap, particularly for those able to meet critical personal needs through AI.
Identifies Low AI Uptake in Trust-Based Consumer Tasks
Amy Wu Martin, partner at Menlo Ventures, sees opportunity where adoption has lagged. “The best opportunities are in messy, recurring problems where general tools break down,” she said.
“Think deeply personal responsibilities like managing money, health care, or coordinating logistics across the entire family.”
Current adoption reflects that gap: 16% of consumers use AI for health-related functions, while 18% turn to it for budgeting or paying bills. Family logistics and home service use remains limited.
Small Businesses Adopt AI Cautiously
While consumer use grows, business adoption is slower—particularly among small companies. According to data from the National Federation of Independent Business (NFIB), which surveyed 20,000 small-business owners, only 24% are currently using AI. A full 76% have yet to adopt the technology.
Larger small businesses are slightly more likely to be using AI, with just under half of companies employing 50 or more workers reporting current use.
AI is now widely used by consumers, but Menlo Ventures notes that business adoption, particularly among smaller firms, remains hesitant. The firm recommends entrepreneurs shift their focus to areas where AI can handle difficult and repetitive challenges.