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ZDNET's key takeaways
- Demand for AI skills skyrocketed in 2025, according to Upwork.
- AI is reshaping jobs more than it is replacing them.
- Employers could soon place a higher premium on freelancers.
The proliferation of advanced AI tools in the workplace isn't resulting in the mass job displacement that many have feared -- not yet, anyway.
According to a new report from freelance marketplace platform Upwork, employer demand for skills that, on the surface, seem most susceptible to AI-driven automation, like software development and customer support, remained stable in 2025. At the same time, demand for skills that focus on incorporating AI into companies' existing workflows has skyrocketed over the past year, Upwork's report found.
Also: More workers are using AI than ever - they're also trusting it less: Inside the frustration gap
As a whole, the findings suggest that while businesses are investing more time and resources in adopting AI tools, they are simultaneously seeking skilled human workers to oversee and manage AI processes effectively.
"Our data shows that AI isn't erasing the need for human work; it's clarifying where human expertise matters most," Teng Liu, an economist at Upwork, said in a statement. "Even as AI capabilities expand rapidly, businesses continue to invest in foundational skills and are willing to pay a premium for talent that brings creativity, judgment, and problem-solving into AI-enabled work."
Most in-demand AI skills
According to Upwork's data, all of which were gleaned from the company's site over the course of 2025, demand for professional skills that specifically mention AI grew by a cumulative amount of 109% compared to the previous year -- a strong indicator that employers across industries are actively embracing AI tools, even if they're not using them to replace human workers.
Demand for AI video generation and editing skills saw the most explosive growth, surging by well over 300% year-over-year. That was followed by demand for AI integration (that is, weaving AI into existing workflows) and data annotation and labeling skills (an important part of training AI models), which grew by 178% and 154%, respectively. AI image generation and editing skills saw a 95% increase in demand, while demand for professionals with experience developing AI chatbots grew by 71%.
AI and the 'spectrum of transformation'
Upwork's new report adds to a growing body of evidence indicating that, despite its marketing hype and rapid technical advances, current AI systems have a long way to go before they can completely automate most jobs.
Recent research from job posting site Indeed found that AI is much more likely to transform specific aspects of jobs rather than replace them wholesale, in large part because each job is made up of a multitude of tasks, some of which can be easily automated by AI and others which, in contrast, still require some degree of human oversight or physical activity.
Seen in this way, the job market can therefore be said to exist along what the authors of the Indeed report call "a spectrum of transformation," with potential for automation determined by each role's particular melange of requisite skills.
Also: Nervous about the job market? 5 ways to stand out in the age of AI
Similarly, a study from Scale AI and the Center for AI Safety posted to the preprint server site arXiv in late October found that leading AI models like Gemini 2.5 Pro and Claude Sonnet 4.5 are only able to handle the thinnest margin of work that's required in the typical scope of a freelance project -- since, again, this kind of work requires a dynamic blend of skills.
The future is fractional
Each of these studies underscores the fact that until a truly artificially generally intelligent agent comes along -- and it's still very much up for debate whether or not that will ever happen -- employers will continue to rely on human workers to handle most roles, or at least most aspects of those roles.
Adoption of AI could also, however, reshape the organizational structure within businesses. Another key finding from Upwork's new report is that over three-quarters (77%) of business leaders that the company surveyed said the technology is causing them to focus on hiring more "fractional" workers than full-time employees. In other words, they're looking for more short-term or contract-based professionals to perform highly specialized tasks that can't easily be automated.
The upshot is that as AI becomes more commonplace, the skills and types of labor that employers value the most will likely continue to shift. "Demand for skilled people hasn't disappeared," Upwork wrote in its report, "it's being recomposed, with strong evidence that the need for human talent endures in a future of work that is broadly influenced by AI."
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