UMD's $1M Grant Aims to Give Maryland Small Businesses an AI Edge

COLLEGE PARK, Md. – March 27, 2026 – The University of Maryland's Robert H. Smith School of Business is set to become a central hub for artificial intelligence adoption among the state's small businesses, thanks to a newly awarded $1.031 million federal grant. The initiative, championed by U.S. Rep. Glenn Ivey (D-Md.), will empower the university's Center for Artificial Intelligence in Business to demystify and democratize AI technology for entrepreneurs and small enterprises across Maryland.

At a ceremony in College Park on March 24, Rep. Ivey presented the funding, which will fuel a major expansion of the school's efforts to equip small businesses with the tools and knowledge needed to compete in an increasingly automated world. In partnership with the Maryland Small Business Development Center (SBDC), the Smith School will develop a suite of resources, including online courses, workshops, and a dedicated online portal, all designed to make AI accessible and actionable.

Bridging the AI Gap for Main Street

For many small business owners, the rapid ascent of artificial intelligence can feel more daunting than opportune. The initiative directly confronts this challenge.

"A lot of small business owners don't know where to start when it comes to AI," said Professor Balaji Padmanabhan, director of the Center for AI in Business and a leader of the new initiative. "But to survive and thrive, they have to be scrappy, they have to be innovative, and they have to be resilient. And AI can help with all of that."

This need for guidance is reflected in the current business landscape. While national surveys show that over 75% of small businesses are using AI in some capacity, a far smaller percentage have deeply integrated the technology into their core operations. In Maryland, data from 2025 indicated that just over half of the state's small businesses were utilizing an AI platform, highlighting a significant opportunity for growth. The primary barriers often cited are a lack of in-house expertise, the high cost of implementation, and the overwhelming task of selecting the right tools from a crowded market.

Professor Padmanabhan underscored the economic imperative of bridging this gap. "Small businesses drive over 40% of the GDP in the U.S. economy, so the opportunity here for AI is significant," he noted. The grant aims to reduce the friction that prevents these vital economic engines from harnessing technology that can streamline everything from customer service to financial management.

A Proven Model Goes Statewide

This ambitious statewide project is not a leap into the unknown but rather a significant scaling of a proven concept. Two years ago, Padmanabhan and his colleague, Clinical Professor Tejwansh Anand, partnered with the Prince George's County Economic Development Corp. to run a successful pilot program. They developed a custom curriculum and delivered workshops to over 50 small businesses in the county, providing them with their first practical steps into the world of AI.

The new federal funding allows the Smith School to take the lessons from that initial success and apply them across Maryland. The Maryland SBDC, which is housed at the university, will play a crucial role in this expansion. The SBDC will help co-sponsor the online courses, assist in curriculum development, and leverage its statewide network to market the programs to the businesses that need them most.

"We're going to help small businesses identify pain points and select suitable AI tools and pilot them in a low-risk, measurable way," said Lora Brown, executive director of the Maryland SBDC. This practical, problem-solving approach is designed to deliver tangible results and build confidence among business owners who may be hesitant to invest in new technology.

The initiative will also feature student-led case competitions, where Smith School students will work on real-world challenges faced by Maryland businesses, developing innovative AI solutions and gaining invaluable hands-on experience.

The University as a Public Innovation Engine

This grant-funded initiative is a cornerstone of the Smith School's broader mission to serve as a public engine for technological literacy and economic progress. The school established its Center for AI in Business in 2024 to formalize its commitment to AI research and education. This new program builds on a track record of successful outreach.

In May 2025, the school launched a free online Certificate in Artificial Intelligence and Career Empowerment program, which attracted an astonishing 50,000 learners from around the world. That program, the first of its kind in the country, demonstrated a massive public appetite for accessible AI education and solidified the school's position as a leader in the field.

University of Maryland President Darryll Pines emphasized the collaborative nature of the effort. "We all need to understand these new, transformative technologies if we are going to maintain our economic prosperity in the state of Maryland in the 21st century," he stated. "But we will only be competitive if we work together just like this."

A key part of that collaborative spirit involves integrating students directly into the work. University of Maryland students will not only participate in case studies but will also be instrumental in building a one-stop-shop online portal. This platform is envisioned as a curated resource where business owners can find the best AI solutions for their specific needs, from AI-powered chatbots and email responders to tools for scanning invoices and monitoring market trends.

Fueling Maryland's Economic Future

The long-term vision for the initiative extends beyond individual workshops and courses. The goal is to create a sustainable ecosystem that fosters innovation and boosts productivity across the state's entire small business sector.

Professor Padmanabhan expressed a firm conviction in the project's potential. "My own belief is that the biggest productivity growth for our economy in the next few years is going to come from the impact of AI on small businesses," he said. "The potential there is tremendous, but this group needs help to reduce the friction, to make it easier for them to access AI and build it into their daily lives."

The federal funding, championed by Rep. Ivey, represents a critical endorsement of this vision. By directing resources toward practical application and education, the government is investing in the resilience and competitiveness of its local economies.

"It's an honor to be able to do this and help you all accomplish this mission," said Rep. Ivey during the presentation ceremony, where he handed an oversized check to university and SBDC leadership. The funding will also support ongoing research to better understand the evolving challenges small businesses face in the AI space, ensuring the program's offerings remain relevant and effective.

Through this powerful partnership between academia, government, and business development organizations, Maryland is making a strategic investment in its economic future, ensuring that the benefits of the AI revolution are not confined to large corporations but are shared with the Main Street businesses that form the backbone of the community.