WATAUGA — Watauga County is No. 1 in the state for AI usage, according to a report by Microsoft’s AI Economy Institute, with an estimated 47.2% of working-age residents using the technology — more than double the average for similar-sized North Carolina communities.

The 2026 U.S. AI Diffusion report breaks down AI usage across the country in an effort to better understand how broadly AI’s benefits are shared across the country.

“We wanted to understand a global view where we’re comparing apples to apples, so that we could better look at where adoption is, and to understand if anyone’s being left behind,” said Kevin White, the senior director of the AI for Good Lab and a co-author of the research behind the diffusion report. “It really gave us a bird’s-eye view of the divide between the global north and the global south.”

To measure AI adoption, Microsoft analyzed anonymous, aggregated data from its device ecosystem to observe when people engaged with AI services, without tracking the content of those interactions. Researchers then compared that activity with the total population of a given area to estimate the share of people using AI. Starting with a global view, the team narrowed the data to the national, state, and county levels, allowing them to compare adoption rates across communities.

In Watauga County, roughly 47 out of every 100 working-age residents are using AI, a figure White said is on the high end. The county’s 47.2% user share is the highest in North Carolina and more than double the 22.9% average for the state’s micropolitan counties — smaller cities and towns like Boone that anchor surrounding rural areas. Watauga is also 23rd in the country for AI use.

Watauga’s ranking stands out in a region where AI use otherwise lags. Several nearby mountain counties sit near the bottom of the state, including Ashe County (18.5%), Avery County (18.6%) and Mitchell County (16.4%). The lowest in the state is Clay County at 13.5%.

While White does not necessarily know the cause of why some areas see higher usage than others, the report did show a big correlation: college towns.

According to the report, counties with larger shares of residents ages 18 to 24 tend to have higher AI user share. In Watauga, home to Appalachian State University, students make up a substantial share of the population.

“Among counties and county-equivalent areas with at least 10,000 residents, each of the top 15 counties by AI User Share has a college or university,” the report states. “As the young-adult share of a county’s population rises, AI user share tends to rise as well, even after accounting for whether a county is metropolitan, micropolitan, or rural.”

The report notes the pattern holds beyond the classroom. Surveys cited in the study show adults under 30 use AI for a wide range of tasks, including information searches, brainstorming, work, email writing, image generation and entertainment.

Nationally, the highest county is Williamsburg, Virginia, at 73.2%, home to the College of William & Mary, where more than a third of residents are college-aged.

White said he attributes that to the younger generation being more tech-forward and being able to use it a little bit more easily.

One of the main things White hopes people get from this study is a better understanding of how AI is being used in their communities. He said the data can help identify communities where people are aware of AI but lack the training or education programs needed to actually use it.

“The AI tools here are really to help empower people, help people be more productive, to use it in different parts of their lives,” White said. “That’s one of the big promises of what AI can bring to the table.”

To learn more about the report, visit tinyurl.com/3347medc.

For more information on the AI For Good Lab, visit www.microsoft.com/en-us/research/group/ai-for-good-research-lab/.