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Why are small businesses obsessed with AI slop? You've definitely seen these around. Small businesses everywhere are plastering their windows, menus, social media, notice boards, and pretty much everything else, with AI. And most of it looks awful. Honestly, I'm starting to miss the generic Canva ones. How did small businesses become so obsessed with AI? You've very likely seen these around. If you live in a city, just walk downtown, and you'll see a plethora of posters with uncanny, unnatural-looking food.
This is just, awful. It doesn't look like food, it looks like… something else. It's not just street signs. There's window posters, mailbox flyers, they'll be on bulletin boards, you'll see them as event posters in bars and community centers, market stalls, loyalty cards, club fundraisers, local sports teams. Have you noticed a lot of it looks the same, in very specific ways? It's got big bold text, on a slight angle on the left side, typically two words, one in color. A huge amount of text, typically a lot of meaningless icons, and an oversaturated, somewhat uncanny AI image. And these posters are everywhere. After Intuit surveyed over 2,200 U.S.
small businesses, two-thirds admitted they used AI regularly, while 28% of them used it daily. Even 53% of those not using AI were considering adopting it in the future. And the U.S. Chamber of Commerce also noticed a rise in generative AI use among business owners, from 23% in 2023 to 40% in 2024 and 58% in 2025. While these self-reported surveys roll out big numbers, researchers looking at something more concrete, like whether businesses were actually paying for AI services, found a strange disconnect. JPMorganChase found that 17.7% of small firms had ever paid for an AI service by the end of 2025.
So, many businesses were using AI, but most seemed to be using free functions. But what are small businesses actually doing with it in practice? A 2026 report from the National Restaurant Association found that 26% of restaurant operators are already using AI for everything from marketing and inventory management to employee scheduling, menu optimization, and taking orders. So hence the oversaturation with AI image slop. It's not even images either. Some are now using AI-generated music in store, to cut down on costs. And there's a reason marketing keeps coming up.
The 2025 Federal Reserve Small Business Credit Survey found that 46% of employer firms were using AI in some capacity. But when you look at what they were actually using it for, 83% of those businesses were using AI for writing or marketing. That was much higher than using it for individual productivity, at 61%, or planning and analysis, at 51%. So yes, AI adoption is rising. But using an AI tool doesn't necessarily mean a business has a mature AI system or a clear strategy for using it. Take Lisa, a freelance graphic designer in Spain. After ChatGPT launched in 2022, she noticed that her usual logo and packaging jobs started disappearing, only to be replaced by clients
asking her to clean up AI-generated designs. By 2025, Lisa said 90% of her incoming logo and packaging requests involved fixing AI-generated content, and this made up 60% to 70% of her annual income. Ironically, after skipping designers for AI, clients came back still expecting them to fix the mess quickly and cheaply, even when the designs had to be rebuilt from scratch. Now, there isn't anything inherently bad about all these AI designs. A small business isn't committing a crime or fraud, aside from maybe a bit of false advertising with the images of food. And those making these aren't bad people. In fact, the most common case does seem to be small businesses, local communities, clubs, as opposed to big business.
But, as we're about to see, the consequences can be pretty devastating. So, why do this? How did we get here? This video isn't to hate on Small Businesses. I'm actually passionate about small business owners doing well. They're the backbone of their communities and the United States. And we're in the best time in history to start a business, and you don't need to start a restaurant, pay a huge amount for real estate, staff, and inventory. You don't need a business that forces you to work 7 days and long hours,
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Choose from over 1300 high-quality products, create your designs, publish them, and then make money. Printify takes care of fulfilment, so there's no upfront cost in production. Printify also integrates with the biggest platforms, including Etsy, Shopify, TikTok Shop, and many more. Printify has the best prices on the market, and with Premium, you get a further 20% discount on the entire catalogue. They've already fulfilled over 60 million orders, to over 200 countries and territories, with a vast printing network across the US and Europe, meaning fewer fees and faster shipping times.
Try Printify with no upfront cost by clicking the URL in the description and use code Logically. The first 100 users get 15% off their first order. Thank you to Printify for sponsoring this video. In San Francisco, Grind & Unwind replaced a local favorite restaurant, and soon put up AI-generated menus. And yeah… this looks horrendous. Doesn't make me want to eat here. It didn't take long for people to notice. The menus eventually made their way to Reddit, where they were mocked, with many comparing the focaccia in the images to a loofah or even a lung.
Someone even graffitied the storefront. Within the week, the owners removed the display, and estimated it cost $700 to cover up the graffiti. But this was meant to be a temporary fix while the owners, AJ and Lyndsey Lozano, figured out how to run a restaurant for the first time, all while taking care of three children under five. "We kind of jumped on the opportunity when the space became available," Lozano told SFGATE. "It was a very, very fast turnaround, so people were like, 'What happened to the Citrus Club?'" "Honestly, we just kinda wanna move forward and forget about the sign and hope people come try
our quality food and really make it a cool spot that locals can gather," Lozano said. I think this gives us a better idea of what's really happening. Marketing is one of the weaknesses of small businesses. The University of Phoenix found that marketing and advertising was the most common skill owners said they lacked. Business owners also tend to avoid marketing tasks… because they lack the knowledge of how to tackle them. People often start a business because they're good at a skill or trade, but don't know how to market it. And there's more to it.
In 2024, the median full-service restaurant made just 2.8% of its sales in pre-tax income. For limited-service restaurants, it was about 4%, while labor alone ate up 36.5% of sales. So, there isn't a ton of money, or time, for a robust, perfectly designed marketing strategy. In 2024, 32% of 1,385 small-business operators said they struggled with marketing because they didn't have enough time, budget, or skills. And the most time-consuming marketing task? Creating content. There's also a lot of pressure today to build a social media presence, or even turn your business into content creation.
It has to look right, be professional, but also not be too professional, and you have to post a lot. And AI offers an easy way out when you are running a restaurant on a 3% margin, while taking care of kids. And, if we look closer at AI, it makes sense why it seems like the solution. Adoption has become frictionless. It's now so easy to instantly generate a graphic, with all the text and imagery you want. This is the same reason small businesses used to… and still do, use lots of mismatched clip art, strange fonts, and Comic Sans. Most just aren't designers. So, at a glance, AI might look professional.
Even if it's not. But that's actually the biggest problem, as we'll see later. Regardless, I don't think business owners think "I got out of paying a designer!" Maybe a few do, but most probably think, "Great, one less thing on my to-do list." "The Facebook page finally has content." "I finally have a poster for the window." "The menu is finally done." And with the economy already putting pressure on small businesses, AI is becoming harder to live without. 77% of small businesses that use AI say that limits on the technology would hurt their growth, operations, and bottom line.
A common saying is "Don't be so busy working in the business that you can't work on the business." And I think all these AI posters and menus prove that this is exactly what happens. Am I telling you to go eat food at a restaurant with an AI poster…? No. Over time, people will realize this doesn't really work. We vote with our wallets, after all. But, also know, the people who made it probably weren't malicious or lazy. The priorities just need adjusting. But the consequences can be pretty severe.
If you've watched this far, you probably like our stuff, so consider subscribing! It helps the channel and means you won't miss future videos. Firstly, we just have the data that AI ads don't really work. At least, the more obviously AI ones. NielsenIQ tested AI-generated advertisements on more than 2,000 people, with around 150 participants also having their brain activity measured using EEG. People generally found the AI-generated ads more annoying, boring, and confusing. Even the higher-quality AI ads produced weaker memory activation than conventional ads. And when the visuals looked cheap or obviously AI-generated,
they required even more effort for people to process, distracting them from the actual message. So AI, and especially the really bad AI slop, can actually take more effort to process. And these businesses are about to find out why companies have entire marketing departments dedicated to things that might seem trivial at first… Like, what color is more likely to trigger a conversion, like a click or purchase? What should the customer notice first? How do we guide the customer's eye? Advertising research has found that the easier an ad is to understand, both visually and semantically, the more positively people tend to respond to the ad and the brand,
and the more likely they are to consider buying. This is why you can learn what a business is selling from just a poster, even while you're distracted by a hundred other things, like driving. But AI, ironically, is making that harder. Instead of immediately understanding the message, the viewer has to spend extra cognitive effort figuring out what they're looking at in the first place. And this problem is huge in the food sector. When you see an image of food, you're not just judging whether the picture looks good. Your brain is also asking… is this edible, familiar, or safe? Most people reach a different conclusion… "uncanny." A 2025 study published in Appetite found
that imperfect AI-generated food could trigger an "uncanny valley" response, with participants finding these images more uncanny than both realistic and deliberately unrealistic images. The researchers also factored in two things that could explain this reaction: food disgust and food neophobia, which is basically an aversion to unfamiliar food. And interestingly, food neophobia drove up this effect. For example, a cartoon taco doesn't need to look real. But a nearly photorealistic AI taco with… impossible textures, fused ingredients, or sauce that seems to defy physics is confusing. Even more so, people will assume the AI quality
is also a reflection of the quality of the actual product. Whether that's true or not doesn't actually matter. As a marketing professor once told me: In marketing, perception is more important than reality. Ironically, marketing and branding is the last thing a lot of small business owners think about, since they're so busy actually running the place. But, it's one of the most important things for customers, because it can decide whether they even try the business, and become a returning customer. But one of the biggest consequences is that small businesses can sacrifice their advantage. And this creates another problem. Small businesses have something
that huge corporations spend millions trying to manufacture…personality. You don't go to a small family-run Chinese restaurant because you expect it to look like McDonald's. Even if the food doesn't have the perfect photos on the menu. Those imperfections are part of the identity. It's family run, and is full of personality and culture. From the decor to the chairs, to the mismatched branding. You see this all over Japan too. Those hidden, tiny restaurants down an alley, run by one grandparent, that just have an "open" sign and nothing else. But AI can start eroding that. Because when every restaurant uses the same glossy templates, perfect food photography, cinematic
lighting, and polished AI-generated graphics… Eventually, a family-run restaurant around the block starts looking like every other business. A small business starts losing one of the biggest things that help it compete with the giant chains in the first place. There is a silver lining. Some businesses have realized this, and are leaning the other way. Leaning into a unique, non-AI style. Embracing imperfect photos, graphics that look a bit unprofessional, but ironically, there's a good bit of charm to it! This is called "strategic imperfection," and it was around before AI was a thing. But people seem much more receptive to those imperfect details now. Of course, you can't design all ads and posters in MS Paint… but a surprising number
of people would rather buy from a brand with an MS Paint sign… than an AI sign. One of the biggest players in AI, OpenAI, is actually in a difficult spot. They've made about a trillion dollar in purchase commitments, but, it's not turning out the way they expected. It seems OpenAI might own the least valuable part of the AI ecosystem. The AI landscape seems to be changing. Click here to learn the rest of the story.
