AI is driving a surge in business formation across the country, with smaller metro areas benefiting disproportionately. In 2026, 40% of Stripe sign-ups were in metro areas with fewer than one million people, up 10% from four years ago. Within metro areas, new business formation is shifting towards the outer suburbs and away from the city center. We saw a similar shift during the pandemic as work from home policies came into place and we’re seeing a reacceleration in the last few years, coinciding with the advent of AI. It seems AI may be unlocking entrepreneurial potential among people who were previously constrained by their location. AI work itself is the exception to this story. The labs and AI product companies cluster tightly in San Francisco and other major metro areas. Agglomeration continues to matter at the technological frontier where knowledge is more tacit and the spillovers that come from proximity are more valuable. Read the full piece at Stripe Economics: