Ramp's analysis of firm-level spending tells a blunt story: companies are shifting spend from freelancers to AI. Tracking the same companies over time, Ramp found the share of total spend going to labor marketplaces fell from 0.66% in Q4 2021 to 0.14% in Q3 2025, while spend with AI model providers for those same companies rose from zero to nearly 3%. More than half of businesses using freelancers in 2022 have stopped entirely, and the companies that spent the most on freelancers shifted to AI the fastest.
What the Study Shows
Researcher Xiang Hui and coauthors, using Upwork marketplace data and published in Organization Science, found the same pattern from the freelancer's side: generative AI has increased both job posts and earnings per new contract in aggregate, but it has disrupted high performers most. For every 1% increase in a freelancer's past earnings, they saw a 0.5% larger drop in job opportunities and a 1.7% larger decrease in monthly income after AI's introduction — suggesting AI substitutes most directly for the polished, high-earning work that looks most like AI output.
The Ramp "Payrolls to Prompts" analysis quantifies the firm-level substitution:
- Fastest shift among heaviest users. Firms in the highest freelancer-spend quartile substituted AI for freelance spend fastest — a pattern consistent with labor tasks that were already outsourced and therefore easiest to automate.
- Small per-dollar offset, large compositional shift. Among the most exposed firms, a $1 decline in freelance spend corresponded to roughly $0.03 in additional AI spend — AI is cheaper per task, so total cost falls even as AI share rises.
- Not all AI work is gaining value. Upwork's 2026 data shows freelancers doing AI work earn 34% more per hour than non-AI peers, but generative-AI creative production saw 90% YoY growth in contract starts with a 13% decline in per-contract earnings — lower-complexity AI execution is commoditizing.
What Survives — and What Grows
Two freelancer segments are diverging:
- High-judgment AI orchestrators. Freelancers applying expert judgment alongside AI — architecting multi-agent workflows, validating AI output, integrating AI into business processes — earned 45% more year over year and now account for a growing share of the 38% of U.S. knowledge workers who freelance (up from 28%).
- Routine AI-assisted execution. Freelancers producing AI-generated drafts with light human polish see rates compressed. Mentioning AI proficiency alone lifts hourly rates by ~25%, but that premium fades without differentiated expertise.
Demand for AI agent development on marketplaces like Fiverr — nearly 30% of AI-related assignments, shifting from simple chatbots to multi-agent systems across web, WhatsApp, and voice — is growing, with AI consulting demand up 109% YoY.
What Hiring Managers Should Do
- Map which freelance spend is automatable. Writing, translation, basic design, and data cleanup are most exposed; strategy, client-facing creative direction, and regulated-domain work are least.
- Re-contract around outcomes. Shift freelancer agreements from hourly to deliverable-based with AI explicitly addressed — who provides the model, who validates output, and who owns liability for hallucinations.
- Track spend composition. In your books, split
Expenses:Contractors:FreelancefromExpenses:AI:ModelProvidersso the 0.66%→0.14% and 0%→3% shift is visible by vendor, not hidden in a single contractor line.
Simplify Your Financial Management
The labor market is repricing freelance work against AI cost. Beancount.io keeps freelance and AI provider spend in version-controlled plain text — so the substitution you make shows up as a ledger composition shift, not just a lower total. Get started for free and hire with the data, not the narrative.