UC Berkeley

GPT-4 Boosts Skilled Kenyan Entrepreneurs by 15% Profit While Costing Unprepared Businesses 10% in Six-Month Study

A six-month experiment conducted by researchers from UC Berkeley, Harvard, and Columbia University examined how access to a GPT-4-based AI advisor affected small business owners in Kenya. The most skilled participants increased profits by 15 percent by adapting model recommendations to local conditions such as power outages, while less prepared entrepreneurs lost around 10 percent of revenue by applying generic advice without verification. The study highlights that the core issue lies not in the technology itself but in users abandoning critical thinking when interacting with generative AI. Earlier findings from Dickinson College showed that 97 percent of participants copied an obviously incorrect ChatGPT answer on a simple task, whereas the group without AI performed better. A simple reminder to double-check results immediately doubled accuracy. Analysis of 1.4 million KPMG work sessions revealed that 95 percent of users treat AI like a vending machine by taking the first output, while only 5 percent engage it as a thinking partner by providing context and challenging responses. The results indicate that merely granting employees access to AI tools reveals little about actual effectiveness without considering skill levels and task-specific oversight.