AI is driving huge productivity gains for large companies while smaller companies are left behind

Artificial intelligence is widening the productivity gap between large and small companies, with large companies able to effectively scale the technology picking up and cutting human labor costs.

Large-cap companies are seeing steady AI-related productivity growth since the release of OpenAI’s ChatGPT model in 2022, according to Wells Fargo’s analysis. Small-cap names have been declining over the same period, meanwhile, the firm found.

“Productivity for the S&P 500 is up 5.5% since ChatGPT, while it’s down 12.3% for the Russell 2000,” Wells Fargo equity strategist Ohsung Kwon wrote in a recent note to clients. “We see other examples of changing trends in consumer, industrial and financial markets.”

Progressive advances in AI this year have prompted major corporations like Amazon to go all-in on the technology, finding ways to eliminate human roles that can be replaced by AI machines.

The performance of S&P 500 against Russell 2000 Small-cap indices reflect this difference in productivity gains. The Broad Market Index is up 74% since ChatGPT’s 2022 launch, while the Russell is up just 39%.

America’s largest companies Deploying internal AI tools Over the years, they have sought to improve productivity, supply chains and, in some cases, reduce headcount. A World Economic Forum survey published in early 2025 found that approximately 40% of companies worldwide expect to reduce their workforce in roles that can automate AI tasks in the next five years.

Layoffs are on the rise this year with many big-name companies target, Meta, Starbucks, the oracle, Microsoft And UPSAnnounced significant, and sometimes historic, reductions in their overall numbers. Companies have attributed the cuts mainly to efforts to streamline operations and growth strategies, but Many are giving a nod to AI Part of the reason is that human worker roles may be eliminated now or in the future.

For one, Amazon is a leader in deploying robots in its facilities, which the e-commerce company says is improving costs and delivery times. The New York Times Reported Amazon executives said in October that the company is on track to replace more than half a million jobs with robots, which it believes will save Amazon about 30 cents on every item it picks, packs and delivers to customers. Morgan Stanley believes in Amazon’s robotics efforts The company could save between $2 billion and $4 billion By 2027.

Klarna, which is the most transparent about how AI is affecting its headcount His staff shrank by about 40%, partly due to its AI investments. CrowdStrike announced a 5% cut in the company’s global workforce in May, citing AI efficiencies and technology “flattening our hiring curve.” IBM’s CEO estimated 30% of non-customer-facing roles to do will be reduced by 2028 and said The Wall Street Journal reported earlier this year that AI chatbots have replaced 200 HR staff and freed up investment to hire more people in sales and programming.

Palo Alto Networks, Walmart And McDonald’s While other companies are leveraging AI that analysts expect to improve margins, we previously reported.

A September Intuit QuickBooks Small Business Insights Survey Of the 5,000 small businesses in the US, Canada, UK and Australia, 68% have integrated AI into their daily operations, with roughly two-thirds reporting increased productivity.

“The numbers don’t lie,” Wells Fargo’s Kwon said in his report.