Is AI coming for freelancers?

There’s been a lot of talk this year about the prospect of AI putting freelancers out of business. And there is some truth to this - within months of ChatGPT launching publicly, demand for freelance writing on the gig platforms Upwork and Fiverr dropped about 30%. Design and coding work took similar hits. That number is real, and we should be clear-eyed about that reality.

But over the exact same stretch, economists measured what happened to freelancer pay, and it only fell about 5%.

A 30% collapse in demand, but only a 5% dent in pay. That seems like a strange result until you look into which work actually disappeared, and the answer isn’t really very surprising. It was the stuff a client could completely describe in a single paragraph: “write 1,500 words on [topic],” or “convert these spreadsheets to [format].” This makes sense when you consider that a paragraph which fully describes a basic task is also a pretty decent AI prompt. And on the flip side of this, the work that couldn’t be boiled down so easily kept going to humans at about the same rates as before.

That’s the whole story, and it’s mostly good news.

So while AI should be taken seriously by all freelancers, the current situation is pretty clear - commodity services that require very little expertise or judgment are getting replaced by AI at a rapid clip. And this is pushing people from those roles into other categories such as web design, code etc, which in turn creates a lot of noisy competition at the bottom end of the scale.

So in the end, we’re right back to where freelancing has always been. If you’re new to the skill you’re offering as a freelancer, it’s going to be a tough road. But for folks with years of professional-level experience, that are differentiating their offering by targeting a niche industry with solutions rather than “skills,” things are mostly normal.

So if you carry one thing into your week, make it this question about your own work: could someone write down exactly what you do in a short AI prompt and get a completely satisfactory outcome? If the answer is yes, it’s a good opportunity to recalculate your route. If the answer is no, you’re already on the correct path.

More from the trail next week.

- Brendan

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If you want the long version - the studies, the charts, where the client money actually went - I wrote the whole thing up here: Will AI Replace Freelancers? What the Data Actually Says