The free-for-all that’s upending America’s side hustle industry

Abbianca Nassar’s side hustle as a freelance ghost writer and brand strategist hasn’t gotten particularly better or worse because of AI, but the buzzy tech has made it more complicated. Some of her clients are all in on it, going so far as to build their own ChatGPT tools for her to use. Others are so paranoid that someone might think they’ve used AI that they make her edit her work so that it’s extra clear that it’s human. Nassar is a fan of the em dash — unfortunately, so is ChatGPT, so clients haggle with her over it. “They’re like, ‘Can you get rid of that? Can you just not use it?’ I’m like, ‘Mate, I’ve always used this,'” Nassar, who lives in London, says.

Nassar is a journalist by trade, but turned her occasional freelance gigs into her main gig after being laid off last year. She’s ambivalent about AI. She’s hopeful a human touch will always be needed for the type of work she does; she’s gotten good at writing prompts; and regardless, she doesn’t feel like she has a choice. “My biggest fear is not adapting and then being left behind,” she says.

She’s not alone. Unlike bigger companies, freelancers and small businesses can’t really afford to make big, potentially money-losing bets on AI, but they can’t bury their heads in the sand, either. They have to go where the wind blows, which these days means moving into a tech-forward, decidedly messy direction.

Talking to freelancers, entrepreneurs, and academics for this story, the general feeling I got was they think that while AI lowers the barrier to entry for small operators and can help them move faster and boost productivity, AI also drives down wages and stifles creativity and originality. Boasting about AI capabilities can be a powerful marketing tool, but contractors also feel pressured to do more for clients while getting the same pay. The end result: It’s easier to get a foot in the door and harder to stand out.

The freelance economy is big. Bankrate estimates that one in four Americans has a side hustle. A report from Upwork, a freelance marketplace, found that skilled knowledge freelance workers made $1.5 trillion in 2024. Cody Luongo, a media consultant based in Charleston, South Carolina, recently joined the ranks of those freelance professionals after losing his job. AI is his “constant companion,” he says, whether drafting a press release or refining a pitch. He thinks it helps him close the experience gap with more established professionals and navigate scenarios he’s never encountered. “AI accelerates my work enough that I can do exponentially more for my clients with their allotted budgets,” he says.

That’s great for budget-conscious clients and, to some extent, for his own bottom line. What it means for his peers overall is a different story. While AI allows more side hustlers to enter the market, it can also make the endeavor less lucrative, thanks to competition from other freelancers and from AI itself, as clients consider a project and think, “Eh, I bet the robots can do it.”

AI reduces hiring and pay for freelancers whose skills overlap with its capabilities, according to research by a group of professors out of Washington University. After ChatGPT’s 2022 release, the number of jobs for writing-related freelancers on Upwork fell by 2% and monthly earnings fell by 5.2%. Freelancers who work in images — designers, editors, artists — saw their opportunities fall even more after DALL-E and Midjourney came out. Jobs fell by 3.7% and income by 9.4%. The fall-off was steeper for freelancers who produce higher-priced, better-executed work.

AI definitely lowers the barrier to entry.

“The drop in earnings, if anything, is actually larger for high-quality freelancers in comparison with low-quality freelancers,” says Xiang Hui, an assistant professor of marketing at Washington University and one of the academics behind the research. “High quality doesn’t really protect freelancers.”

Less-experienced freelancers are able to punch up their work with AI, flooding the marketplace with cheaper stuff that clients may find “good enough.” There’s still an obvious difference between “good enough” and truly great work, but the shrinking of the gap while the price difference remains the same means more experienced people lose part of their competitive edge.

“AI definitely lowers the barrier to entry, so it makes many activities accessible for more people,” Hui says.

Nick Loper, who runs the website Side Hustle Nation —a community for part-time entrepreneurs and side hustlers— tells me he noticed someone on his site who has an AI headshot company. “Well, shoot, that’s my wife’s side hustle, taking pictures of people,” he says, but instead of charging $300-$400 for a half-hour session for human-taken headshots, the new entrant charges $29 and asks the client to “upload a bunch of selfies that it spits back out” as headshots. It may look a little weird — or unrealistically better, if the AI photo editor is extra kind — but people seeking out a deal might decide the price is worth the fake-ish product.

In terms of experience and expertise, AI is a two-sided coin. For this story, I spoke with one PR professional who says the technology has allowed her to expand into hosting events. She’s able to use AI to draft invite copy, reminders, and panel questions and to create recaps, produce videos, and compile attendee lists after the fact. She charges more, too — instead of invoicing $200 an hour for three hours of work, $600 total, she charges $1,200 for the whole AI-enhanced shebang.

On the flipside, I heard from a marketer who complained that freelance platforms are now flooded with AI-generated job postings and applications. There’s “no sense in crafting a perfect pitch to a client” these days because it will compete with AI pitches. I also heard from an Etsy witch who said she’s “drowning” in an ocean of what’s obviously AI competition — everything looks the same, with stereotypical images and suspiciously similar names. “It’s so frustrating knowing that these bots are preying on people who seek genuine spiritual guidance and receive something far from,” she says. Whatever your beliefs, I imagine that if you’re paying for a psychic, you’d rather it be the “real” thing than whatever ChatGPT is coming up with.

For many workers, whether freelance or full-time, AI has become an important tool in their work. Designers and coders can use it for organization, ideation, and client quotes. Canva, a graphic design platform, says its younger users, in particular, are reliant on AI for tasks such as brand design and data analysis. But someone letting on that they’re leaning on AI may undercut how the work is perceived, fairly or not. Using AI is still considered taboo in many professional fields, particularly in creative ones.

When people believe work is produced with AI, they tend to reduce compensation for it, explains Shane Schweitzer, an assistant professor of management and organizational development at Northwestern University’s D’Amore McKim School of Business. The quality of the work doesn’t matter: People hold the same exact thing in less esteem when they think AI was involved in its creation. “People just think they deserve less credit,” Schweitzer says.

This is somewhat unfair — a product is a product, however it’s made. But it’s also understandable. While many workers and leaders position AI use as a productivity boost, others see it as a cheat and a sign of laziness. As much as the quality may sometimes be comparable, anyone who’s used ChatGPT or other AI tools knows it can fall short. AI also relies on previously created material, which can homogenize output.

“AI can raise the baseline of creativity, but fewer people are having breakthroughs. You need breakthroughs for innovation,” Schweitzer says. “It’s not leveling the playing field necessarily, it’s just creating slightly more competence.”

One of the main arguments in favor of AI is that it handles mundane tasks and frees people up to do the more creative, interesting work. That’s true of many side hustlers I spoke to, who used it for the boring tasks most everyone dreads. Lisa Driskil, who jokes the “only thing that’s not for sale is my husband” in her eBay store, says AI saves her mounds of time in writing product descriptions and editing photos, especially given she has a full-time job. Ross Buhrdorf, the CEO of ZenBusiness, a business-in-a-box platform, recently launched an AI assistant, Velo, that supplements his services by helping people navigate issues such as taxes, regulations, and banking. For small business owners, “the biggest demand is their time,” he says. His company — now accompanied by AI — helps them figure out the logistics.

This may work for, say, a plumber or designer who is sick of invoicing. But if they’re using AI to learn and hone their craft, that’s an issue.

“It’s being adopted so broadly that it’s, at least eventually, going to prevent people from getting and using key skills,” says Erin Hatton, a sociology professor at the State University of New York at Buffalo.

Creative work often emerges from iteration: The way you get better at the thing is by doing the hard work repeatedly — generating ideas, working through tweaks, taking feedback into consideration — not by slightly adjusting a robot’s version of the thing. Moreover, a significant portion of the side hustle work AI is creating does not sound particularly enjoyable — checking the AI’s homework is a tedious endeavor, and the technology makes errors.

Every contractor I’m hiring, I’m looking at what I’m paying them, and I’m thinking about how I’m going to get at least a 3X ROI on this person’s time.

Jinjin Qian, executive vice president of Strategic Finance at Fiverr, a freelance marketplace, says the demand side of their platform has changed significantly due to AI. Instead of hiring someone to build something from the ground up, clients use ChatGPT or other AI tools to write a blog post (or, in one case, a novel), make a video, or vibe code an app themselves, and then take it to a professional to get it across the finish line. She says the demand for simple, low-end jobs on the platform has plummeted.

On the client side, the equation is pretty straightforward: Getting an AI to do more of the work or shifting expectations in the name of AI saves money.

Guillermo Fernandes, a blockchain entrepreneur and consultant based in New York, tells me his since-sold compliance startup hired four coding interns in 2023. The next year, they hired only one; the rest they replaced with AI coding tools. It’s not that they never hired freelancers again, but when they did, they were true “experts,” he says. Carey Bentley, the CEO of Lifehack Method, a productivity coaching company, is similarly eager to explain how she’s been able to cut people thanks to AI. She recently got rid of the woman handling their email newsletters after determining her output wasn’t up to par, especially once they added social media to her plate. “Every contractor I’m hiring, I’m looking at what I’m paying them, and I’m thinking about how I’m going to get at least a 3X ROI on this person’s time,” she says. Anyone whose fields are going to be taken over by AI needs to hop to it on reskilling and “get on the offense,” she says.

Both Fernandes and Bentley are service providers themselves — the plot thickens when the shoe is on the other foot. Fernandes is now consulting for crypto and blockchain companies looking to lobby on Capitol Hill, and he works faster by using AI to analyze the difference between iterations of legislation. Bentley has her coaches record conversations with clients and then put them into AI to create personalized summary emails about what was discussed. They seem OK as productivity hacks, but they may diminish the perceived value of their services. Fernandes tells clients that AI tools are why he charges them less than what a regular consultant would. Bentley’s clients are unaware that their personalized emails are generated by AI.

Many freelancers and side hustlers recognize that they and others are riding the tiger. They know it’s dangerous — they just think it won’t eat them.

Like people in creative fields that I spoke to, I sometimes use AI for my job — for this story, I asked it if my opening made sense — and for personal questions, such as whether my outfit is weather-appropriate. I can see the value in it in terms of productivity, but I also worry about what it means for the ability to generate quality, original work. AI certainly allows for more content and more output. But is it better? One person I spoke to for this story excitedly told me about how she’s used ChatGPT to create and write a Substack. Based on our conversation it seemed less like she wanted someone to consume the content, and more for the content to exist as a calling card or line on her résumé. Perhaps the best case I hear for AI used in a side hustle comes from Kimberly Storin, the chief marketing officer at Zoom, who also happens to own a family business making customer furniture in Austin. They use it to put together quotes, find materials, and create rough designs, allowing them to submit proposals to clients faster than the competition. She’s lost a couple of projects where the AI-generated estimate was probably higher than it should have been, but even that’s valuable information for training the AI to get better. Plus, she can use Zoom’s summaries of internal meetings at the shop when she has to focus on her day job.

AI opens doors for many side hustlers. It makes it easier to get moving and tackle the basics, clearing some of the more mundane administrative tasks out of the way. But it’s not the fix that its proponents often cast it to be. Researchers looking at the broad swath of the tech’s capabilities and creative freelancers who are in the trenches seeing AI outputs on a daily basis told me that while lifts everything to a 6/10, it greatly reduces the chance of a 9/10 or 10/10, raising the floor but lowering the ceiling. It turns the goal in many projects from “great” to “I guess that’ll do.”

Emily Stewart is a senior correspondent at Business Insider, writing about business and the economy.

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