The Impact of AI Tools on the Freelancing Industry

Key Takeaways:

• As AI tools gained traction, Fiverr and Upwork have seen a downward trajectory in downloads since 2023, per ST data, with Fiverr declining by 18% and Upwork by 22% in 1H24 YoY

  • User engagement on Fiverr and Upwork also experienced a decline. In 1H24, average user time spent on Upwork for Clients, Upwork for Freelancers, and Fiverr for Clients dropped by 24%, 20%, and 15% YoY, respectively, reflecting a shift away from freelancing tasks towards AI solutions

• The Upwork for Freelancers app has seen a 32% drop in MAUs over five quarters, while the Upwork for Clients app grew MAUs by 20% YoY in 2023 and continued to rise by 3% YoY in 1H24. Despite AI tools reducing entry-level job postings and app engagement on the freelancer side, there is an ongoing and increasing demand for freelance services requiring advanced human skills that AI cannot fully replace

• Recognizing the surge in demand for AI expertise, Fiverr and Upwork have increased their AI-themed ad spend to highlight the availability of AI experts for various projects, targeting clients seeking AI skills. In 2Q24, Fiverr and Upwork collectively increased their AI-themed ad spend by 584% YoY

• An analysis shows that approximately 85% of ChatGPT's usage variability during workweeks is driven by work-related activities, compared to lower percentages for ChatOn (68%) and AI Chat Smith (56%). This highlights ChatGPT's prominent role in professional settings and its widespread adoption for work-related tasks

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