Census Bureau Forecasts Industry Artificial Intelligence (AI) Usage Increase to 12% by Fall 2024

The Department of Commerce anticipates an annual increase of 12% by early Fall 2024, according to the agency’s recent report on “Tracking Firm Use of AI in Real Time: A Snapshot from the Business Trends and Outlook Survey.”

Survey findings showed that bi-weekly estimates of industry AI usage rose from 3.7% to 5.45% from September 2023 to February 2024. At this rate, the agency expects overall usage to be about 6.5% by early Fall.

“Timely and accurate measurement of AI use by firms is both challenging and crucial for understanding the impacts of AI on the U.S. economy,” the report said.

Survey Methodology:

The annual BTOS survey begins in September of each year and includes approximately 1.2 million single- and multi-location employer businesses in all 50 U.S. states, the District of Columbia,  and Puerto Rico. The survey covers industry sectors under the two-digit NAICS by state. However, the agency considers NAICS Code Sectors 110000, 111, 112, 482, 491, 521, 525, 813, 814, and 92 out of scope and does not include those in the survey. It also excludes businesses unclassified with the legal form of organization as tax-exempt or unknown.

Participating firms respond to core questions revolving around changes or movements in actual and anticipated increases or decreases for specified concepts of interest including employment, and input and output prices. Reported responses cover the two weeks before the report and look forward to the next six months.

In September 2023, the BTOS began including AI-specific questions about current and anticipated future use. In December 2023, BTOS added a supplement covering six bi-weekly periods to obtain more in-depth data on the types of AI technologies and applications used. This included data on tasks, labor, and capital based on whether AI usage augmented or replaced various roles and how it impacted those roles. The report included data on overall firm-weighted and employee-weighted responses. This article focuses on the firm-weighted data only.

Survey Results

The first collection period in September 2023 revealed a 3.7% usage rate among U.S. firms producing goods and services during the two weeks before reporting. Subsequent collection periods through February 2024 showed that AI usage increased to 5.4%, (a 46% increase) over those 5 months. Data on future AI usage increased slightly (.3%) over the same period. Based on the agency’s anticipation that the current and future rates will converge, the BTOS combined the Fall 2023 usage rate (5.4%) with an expected 6.6% projected Fall 2024 rate to calculate the expected growth rate. The agency expects future surveys to confirm these expectations, the report stated.

The survey also showed that industry use varies widely along industry markets and geographical locations. Unsurprisingly, AI usage was highest for Information Technology (NAICS Codes 51) at 18%.  BTOS expects this to increase to 21.5% over the next 6 months. Among the geographical locations surveyed, usage was highest in Colorado, Nevada, Utah, California, Arizona, Washington, and in eastern states including Florida, Delaware, Massachusetts, and the District of Columbia. The final report also included results based on firm size and age, AI replacement of worker tasks and equipment operations, AI use-related changes, and the relationship between AI use and business performance. 

Contracting Implications

The government continues developing standards for appropriate and secure AI use, especially regarding biotechnology, cybersecurity, infrastructure, and national security. "Executive Order 19360, “Promoting the Use of Trustworthy Artificial Intelligence in the Federal Government" stresses the need to manage internal and external risks associated with AI and recognizes the importance of responsible innovation, competition, and collaboration around the technology. The Order also outlines specific tasks for developing guidelines and regulations that will eventually become part of the Federal Acquisition Regulation.

Vendors can expect to see contracts, subcontracts, or funding opportunities for developing security-related evaluation processes, foundational models, and testbeds for AI usage. The need for research and development, training, and education will also drive modifications to existing contracts and incorporation into future contracting and subcontracting requirements. These changes will address contracting aspects such as data security, validation and retention, identity credentialing and privacy impacts, equity and diversity in acquisition, and collective bargaining agreements. Contractors can also expect increased AI language in solicitation packages, reporting requirements, and performance plans. To address these changes, vendors need to stay informed on government changes and ensure their internal AI policies and procedures remain closely aligned with expected future FAR changes. 

The following charts show the firm-weighted results. Complete results are available in the report.

Current and Future AI Usage 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current and Future by AI Type/Applications

 

 

 

 

 

 

 

 

 

 

 

 

 

Current and Expected AI Use by NAICS Sector 

 

Current and Expected AI Use by State 

 

 

 

 

 

 

 

 

 

 

 

Data Source: Census Bureau