Artificial Intelligence vs. Contractors: What Should Businesses Choose?

Artificial Intelligence is expected to remain the world’s most important technology in 2025. Businesses see it as a way to increase productivity and reduce costs, which sounds great – but what if humans are replaced by automated solutions? Will contractors be the first to get cut?

In this article, we’ll explore this question and explain what contractors need to do to stay relevant.

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Contractors: perfect performers or a risk?

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Many companies understand the advantages of hiring contractors: access to highly qualified professionals, easy scaling of teams for specific projects, and, of course, savings on taxes, benefits, and training.

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But the biggest advantage is predictability. A qualified contractor receives a task, completes it without the need for close management, and delivers the result on time.

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Let’s look at an example from the legal industry. Suppose a client needs to prepare a statement of claim. They find a lawyer (a contractor), discuss the task, and agree on a price and a deadline. The contractor goes to work and delivers the document. For the client, the process looks like this:

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For the contracting lawyer, it’s more complicated: she analyzes the case, gathers information, and develops a strategy. She solves problems if something goes wrong. And then she prepares the document, checks it, and sends it to the client.

That is, the contractor takes complete responsibility for the task and guarantees that the work gets done properly.

If the lawyer doesn’t make any mistakes and doesn’t suddenly have to deal with a personal emergency, the story ends well. Now, what if we replace the contracting lawyer with AI and try to do the same thing?

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AI in business: opportunities and pitfalls

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AI doesn't get tired or sick. It can work 24/7, and subscribing to services with AI is cheaper than hiring practically any contractor out there. So what’s the catch?

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AI can perform individual tasks, but it’s not yet capable of building a workflow on its own. This requires a manager who monitors the process, asks the right questions, and checks the results, taking into account changes in the external situation, the business’s goals, and other nuances.

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You can only partially automate the preparation of a statement of claim. AI can help collect and analyze data and create a draft document, but it won’t be able to take all the nuances of the case into account. Crucially, it also won’t be responsible for the result.

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This is roughly what working with AI would look like:

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An important point: work produced by AI always needs to be checked by an expert. Blind trust in neural networks has already led to several scandals. In 2023, a lawyer from New York used ChatGPT to search for legal precedents. It responded with fictitious cases, which the lawyer and his colleague failed to check. When this came to light, the court fined the lawyers $5,000 each.

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Additionally, AI is vulnerable to leaks and glitches. For example, in March 2024, ChatGPT users suddenly started seeing other users' data. It’s always important to consider security issues when implementing new technologies.

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The solution: contractor + AI?

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Today, the best solution for fast and high-quality results is to hire people who have already integrated AI into their work. A majority of freelancers in the US (75%) use generative AI, though not all are open about it.

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To find the right professional, look at people’s portfolios and activity in professional communities (GitHub, Behance, Reddit). Those who apply new tools gain a competitive advantage and, according to expert forecasts, will be in greater demand in the years ahead.

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Process transformation, not automation

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In most fields, comparing AI and contractors directly is wrong. This isn’t a competition where someone wins based on one criterion, like who swims 50 meters faster or lifts more weight.

Replacing humans with AI is process transformation, not automation. To make it work, a company needs to build new operational pipelines and learn how to apply them. 

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Before doing so, the business should ask questions like these:

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• whether its processes truly need to be transformed,
• which tasks can already be entrusted to AI, and
• which ones are best done by humans for now.

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If a company doesn’t have the infrastructure to manage data and deploy ready-made AI models, the likelihood of project failure is greater. In that case, it’s better to assign tasks to contingent workers. They’ll be contract-bound to deliver, and since many are already using AI professionally, your company will still gain a strategic advantage.