AI transforming a cityscape, representing the changing job market.

Will AI Replace You? Unveiling the Shifting Landscape of Online Work

Lena Kashyap in Tech & Innovation August 2025 • 3 min read.

"New research reveals how AI is reshaping online labor markets, impacting freelancers and job opportunities."

The rise of artificial intelligence (AI) has sparked both excitement and anxiety, particularly concerning its potential impact on the job market. While AI offers numerous benefits, its increasing capabilities raise questions about the future of work and the skills that will be valued.

A recent study delves into these concerns by investigating the effects of AI, specifically large language model (LLM) based generative AI like ChatGPT, on online labor markets. These platforms, connecting freelancers with clients for various tasks, provide a unique window into the evolving dynamics of work in the age of AI.

By analyzing extensive data from a prominent online labor market, the research uncovers significant shifts in demand, supply, and competition, revealing how AI is reshaping the landscape for freelancers and the skills they need to thrive.

AI's Impact on Demand and Supply in Online Labor Markets

AI transforming a cityscape, representing the changing job market.

The study's analysis revealed a notable decline in labor demand, supply, and transactions within online submarkets related to text and programming jobs after the introduction of ChatGPT. These are areas where ChatGPT excels, suggesting a direct impact on the need for human workers.

Simultaneously, the affected submarkets experienced an increase in job complexity and heightened competition among freelancers. This indicates that while the overall volume of work may be decreasing, the remaining tasks require more advanced skills and attract a larger pool of applicants.

Decline in Labor Demand: Fewer text and programming jobs are being posted.
Decrease in Supply: Fewer freelancers are actively bidding on these types of projects.
Increased Competition: The remaining jobs attract more bids per project.
Higher Job Complexity: Clients are setting higher budgets for the remaining projects.

Interestingly, the research found that the decrease in labor supply was less pronounced for programming-related jobs. This suggests that freelancers previously engaged in text-related tasks are transitioning to programming, seeking new opportunities in a shifting market.

Adaptation is Key

As AI continues to evolve, it's crucial for individuals and businesses to understand these shifting dynamics. Freelancers need to proactively adapt by acquiring new skills and positioning themselves strategically. Businesses and governments should also recognize the transformative impact of AI on the labor market and develop policies to support workers during this transition.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: https://doi.org/10.48550/arXiv.2308.05201,

Title: "Generate" The Future Of Work Through Ai: Empirical Evidence From Online Labor Markets

Subject: cs.ai cs.hc econ.gn q-fin.ec

Authors: Jin Liu, Xingchen Xu, Xi Nan, Yongjun Li, Yong Tan

Published: 09-08-2023

Everything You Need To Know

How is ChatGPT specifically impacting the demand for online text-based jobs?

The research highlights a significant decline in labor demand within online submarkets related to text-based tasks. Areas where ChatGPT excels have seen a direct impact, meaning fewer text-related jobs are being posted by clients as ChatGPT can perform similar tasks. This shift suggests that businesses are now leveraging AI like ChatGPT for tasks that were previously outsourced to human freelancers. This is a direct consequence of the capabilities of large language models like ChatGPT to generate text, reducing the need for human writers, editors, and content creators in the online labor market.

What skills are becoming more valuable for freelancers in the context of AI's impact on online labor markets?

As AI, particularly ChatGPT, reshapes the online labor market, the demand for certain skills is changing. While the overall volume of work in areas like text and programming may decrease, the remaining tasks are becoming more complex. This implies that skills requiring higher levels of expertise and sophistication, such as advanced programming, are becoming more valuable. The decrease in labor supply for programming jobs was less pronounced, indicating that freelancers are adapting by transitioning to these skill areas to maintain competitiveness. This highlights the importance of continuous learning and skill development to stay relevant in the evolving job market.

What is the overall effect of ChatGPT on the competition among freelancers in online labor markets?

The introduction of tools like ChatGPT has intensified competition among freelancers. The research indicates that the jobs that remain in the online labor market, particularly in text-related areas, attract more bids per project. This means more freelancers are vying for a reduced number of opportunities. The increased competition makes it more challenging for freelancers to secure projects and necessitates that they differentiate themselves through enhanced skills, competitive pricing, and strategic positioning to stand out from the growing pool of applicants.

How does the study suggest freelancers should adapt to the changing landscape of online work due to AI?

The study emphasizes the need for freelancers to proactively adapt to the changes brought about by AI. This adaptation involves acquiring new skills, particularly those that complement or are not easily replicated by AI. Freelancers are advised to focus on areas where human creativity, critical thinking, and complex problem-solving are essential. Strategically positioning oneself also means understanding market trends and focusing on niches where AI's impact is less pronounced. The transition to programming-related tasks, as the study notes, illustrates a practical step toward adapting and securing future opportunities in the online labor market.

Beyond freelancers, what other entities should be aware of the implications of AI on online labor markets, and what actions might they take?

Besides individual freelancers, businesses and governments should recognize the transformative impact of AI on the labor market. Businesses need to understand how AI tools, such as ChatGPT, affect their operational needs and adjust their workforce strategies accordingly. This might involve re-skilling existing employees or redefining job roles to integrate AI more effectively. Governments should develop policies to support workers during the transition, including providing resources for retraining and skill development. This ensures that the workforce can adapt to the changing demands of the labor market and that economic growth remains inclusive.