Latino Donor Collaborative Releases Groundbreaking Report Highlighting AI’s Blind Spot: How Stereotypes Are Costing Companies Billions

• Latino-owned firms adopt AI at nearly twice the rate of majority-owned firms, yet algorithms still stereotype them
• New 2025 U.S. Latinos in Tech Report: AI Edition exposes a critical disconnect between Latino reality and AI portrayals, creating missed business opportunities
• Despite leadership in business, education, and STEM, AI systems fail to recognize Latinos as innovators, blinding companies to growth

LOS ANGELES--(BUSINESS WIRE)--The Latino Donor Collaborative (LDC), today released the 2025 LDC U.S. Latinos in Tech Report: AI Edition – Hidden in the Algorithm: Is AI Perpetuating Stereotypes?™. This fifth annual edition, sponsored by Wells Fargo, highlights AI bias not only as a representation issue but as a significant missed business opportunity.

The analysis, based on 1,575 AI-generated narratives across five business and educational contexts, reveals that while U.S. Latinos are among the most active adopters and builders of artificial intelligence, AI systems frequently misrepresent them, reducing Latinos to narrow, stereotypical roles instead of recognizing their reality as innovators, entrepreneurs, and tech leaders.

For example, when prompted to generate a profile of a Latino engineer or CEO, AI tools most often returned personas tied to family or service roles, a striking contrast to reality, where Latinos are earning engineering degrees at record rates and leading AI adoption in business. This disconnect has direct business consequences. It obscures growth opportunities and misguides strategies, from product design to workforce development.

Key findings from the report include:

• High AI Adoption: Latino-owned businesses were among the earliest adopters of AI, moving quickly to integrate these tools into operations. By 2024, 14% of scaled Latino-owned firms were already using AI, nearly double the rate of majority-owned businesses at that time. This early embrace positioned them at the forefront of technology-driven transformation, a lead that has only accelerated as adoption rates have grown exponentially.
• Educational Engagement: Latino students were among the earliest adopters of generative AI in education. By 2024, 57% of Latino teens reported using AI for homework, 10 percentage points higher than teens from other demographics, and more than half relied on it for translation and content creation. This early and disproportionate engagement positioned Latino youth as leaders in the first wave of AI adoption, a trend that has only accelerated since.
• STEM Momentum: From 2012 to 2022, undergraduate engineering degrees awarded to Latinos grew by 56.7% — the largest increase of any group. Master’s degrees grew 37% and doctorates 85%, fueling the pipeline that feeds advanced technology industries.
• Workforce Alignment: With 11.8 million STEM jobs projected by 2033, Latinos’ early adoption of AI in both business and education strengthens their role in building the workforce of the future.

“Technology must reflect reality,” said Ana Valdez, CEO and President of the LDC. “U.S. Latinos are innovators, builders, and entrepreneurs driving the AI era. Failing to capture that reality is not only inaccurate, but also economically dangerous. The data in this report should be a wake-up call for AI developers and institutions everywhere.”

Despite these advances, the report shows that GPT-4 and similar AI platforms consistently depict Latinos through cultural themes such as family or identity struggles, even when prompts specify professional or entrepreneurial roles. This reliance on limited stereotypes not only misrepresents reality, but it also distorts business strategy in areas from product design to recruitment to customer engagement.

“Wells Fargo is proud to partner with the Latino Donor Collective to spotlight the rapidly evolving landscape of artificial intelligence and its growing impact on the business landscape," said Patty Juarez, Executive Vice President of External Engagement at Wells Fargo. “The data in this report offers essential insights that can help companies navigate change and make informed, responsible, and inclusive decisions about the future of their industries.” The report concludes with recommendations for AI companies, policymakers, and investors as a roadmap for growth. Key action steps include:

• Technology and AI Companies: Audit and retrain models to reflect Latino professional and entrepreneurial realities.
• Investors: Track and fund Latino entrepreneurs who are leading indicators of AI adoption and innovation.
• EdTech Firms: Build with the most AI-literate youth market in the U.S. in mind, as Latino students are already power users of generative AI.
• Enterprise SaaS and Automation Platforms: Support Latino-owned businesses already deploying AI at scale.

The 2025 LDC U.S. Latinos in Tech Report: AI Edition will be officially launched at VELOCITY 2025 in Los Angeles this September.

About Latino Donor Collaborative

The Latino Donor Collaborative (LDC) is an independently funded 501(c)(3) nonprofit organization and think tank. The LDC has consistently provided economic and business data through meticulous research and fact-based insights. Its reports have become essential tools for U.S. resource allocators, highlighting the growing opportunities presented by the myriad contributions of U.S. Latinos across the social spectrum. Learn more at www.latinodonorcollaborative.org.