This paper studies whether, how, and for whom generative artificial intelligence (GenAI) facilitates firm creation. They use the release of ChatGPT as a global shock that made powerful cognitive tools widely accessible, lowering start-up costs. Leveraging high-resolution and uni-versal data on Chinese firm registrations and AI patenting up to 2025, they find that geo-coded grids with stronger AI-specific human capital experienced a sharp surge in new firm formation - driven entirely by small firms, contributing to 6.0% of overall national entry. Large-firm entry declines, consistent with a shift toward leaner ventures. New firms are smaller in capital, share-holder number, and founding team size, especially among small firms. The effects are strongest among firms with potential AI applications, weaker financing needs, and among first-time en-trepreneurs. Further evidence suggests that entrepreneurs with AI-specific skills-not general capacity-benefit the most. Overall, their results highlight that GenAI serves as a pro-competitive force by disproportionately boosting small-firm entry.