New Orleans startups lead US in AI adoption at 77%

New Orleans entrepreneurs are embracing artificial intelligence at rates higher than the national average, with 77% believing AI will have a major long-term impact on their businesses, according to Tulane University’s 2025 Greater New Orleans Startup Report. The findings position Louisiana seventh nationally for generative AI adoption among small businesses, with 65% using the technology compared to 58% nationwide—a surprising development for a region historically known as a late adopter of tech trends.

What you should know: The seventh annual report surveyed over 120 startup businesses across a 10-parish region in south Louisiana, revealing unprecedented AI enthusiasm among local entrepreneurs.

• Of startups already using AI tools, 85% reported positive experiences, citing productivity gains, expanded market share, and cost savings.
• High-growth startups—typically tech-based ventures aiming to scale quickly—gained more from AI implementation than traditional small businesses.
• “Historically speaking, when trends happen, we’re not usually the first movers,” said Rob Lalka, a Tulane business professor who helped create the report. “We’re maybe middle of the pack or later, but with AI, there are more people here using it, and we are trying to really harness its tools to get a competitive advantage.”

Mixed signals on hiring: Despite AI optimism, New Orleans startups are showing unprecedented caution about workforce expansion and office space investments.

• A slight majority plan to add employees over the next year, but 22% say they do not—the highest percentage in the report’s seven-year history.
• High-growth companies remain more bullish about hiring than others, while construction startups reported the most recent hiring activity.
• Food and beverage companies described net employee losses, reflecting sector-specific challenges.

Funding landscape: Most surveyed companies are “bootstrapping” their operations using personal finances or credit card debt to launch their businesses.

• The next most common funding sources include friends and family, angel investors, convertible debt, and venture capital.
• The top categories of surveyed companies span software, professional services, food and beverage, media, and healthcare sectors.

Going statewide: Tulane’s Albert Lepage Center for Entrepreneurship and Innovation plans to expand the report statewide next year, partnering with Louisiana Innovation to create comprehensive startup activity data.

• The survey will be renamed the Louisiana Startup Report and provide parish-by-parish data to help stakeholders track regional trends, innovation clusters, capital gaps, and sector momentum.
• “What began as a local effort to understand our startup landscape will now serve our entire state,” said Paulo Goes, dean of Tulane’s business school.

Building the ecosystem: The expansion represents part of broader efforts to formalize Louisiana’s entrepreneurial landscape following high-profile tech acquisitions in recent years.

• The NOLA Entrepreneurship Council met for the first time this month as a working group addressing policy, funding, and quality of life issues critical to the innovation ecosystem.
• GNO Inc., the region’s economic development nonprofit, created Startup NOLA in 2022, producing online heat maps of entrepreneurial activity, startup news, and events calendars.
• These initiatives follow successful exits by Louisiana-based tech startups that brought capital infusion and proved the state could produce winners despite being far from coastal tech hubs.