What Upwork's Recent Bets Tell Us About The Future Of Work

Forbes

a day ago

We're all waiting to see how AI reshapes productivity, hiring, and organizational design, but we don't need to wait blindly. If you want a front-row seat to the future of work, watch where companies like Upwork, Fiverr and the rest of the freelance workforce enablement industry is doubling down.
While the broader labor market nervously refreshes their browser views, Upwork has already started placing its chips. And judging by their record-breaking Q2 earnings, the house may be on to something.
The company's latest moves across AI deployment, freelancer enablement, and strategic acquisitions paint a clear picture of at least what they expect to be ahead. According to the plays they are making, tomorrow's workforce will be more fractional, more agent-augmented, and more capable of taking on entire department's-worth of work.
And if Upwork is right, we're witnessing a re-architecture of how companies function entirely.
Fractionality and freelancing are now career paths, not backup plans
Once seen as a fallback option or bridge between full-time roles, freelancing and fractional work have evolved into legitimate, often aspirational, career paths. They're no longer a signal of something someone couldn't get, but what they've chosen to build. In fact, a growing cohort of ambitious professionals now find deeper autonomy, greater resilience, and surprising stability through this model.
Roei Samuel, CEO of the expert talent platform Connectd, sees this shift firsthand. 'Fractional, remote, and freelance used to be buzzwords that hid behind them more disappointment than excitement,' he explains. 'Now they represent structured, intentional ways of building a working life. Freelance answers the what, remote the where, and fractional the who which is the highly skilled professional that startups and scaleups are all actively pursuing.'
Upwork is among the companies that are tapping into this growing appetite with force. In Q2 of 2025, the company posted record revenue of $194.9 million. Freelancers on the platform aren't just landing more work, they're handling more sophisticated, higher-value engagements. Gross services volume from AI-related work surged 30% year-over-year signaling that the freelancers are compounding real contributions instead of just churning out logos.
As Dave Bottoms, SVP and GM of Marketplace at Upwork, puts it: 'We're seeing freelancers step into more complex problem-solving roles. The ones embracing AI in particular are operating at a higher level, delivering deeper value across more ambitious projects.'
Here we see one major workplace trend in action. As much as freelancers are using AI to complete work faster, they're also increasingly being hired to do the AI work itself.
Fractionals will be powered by AI, and that changes everything
'We're seeing a big shift,' says Bottoms. 'More and more jobs require freelancers to interface directly with AI, whether it's orchestrating agents, integrating AI tools into client workflows, or in some cases, building those tools from scratch. The complexity of work on the platform is rising, and the talent is rising with it.'
Bottoms explains how the platform itself is evolving to make this possible, with AI-native tools embedded across the workflows, like Uma, Upwork's Mindful AI. 'It's essentially an always-on AI agent. It helps with proposal writing, real-time job alerts, project scoping, so everything that we know tends to create friction. The idea is to reduce the time between joining the platform and becoming a high-performing, revenue-generating freelancer.'
But the AI transformation goes deeper than tooling. What we're witnessing is a structural shift that isn't limited to Upwork. The most efficient productive unit of work is no longer necessarily the firm, it's the individual, AI-augmented freelancer.
With the right agent stack, a single fractional can now match, or even exceed, the output of a small team. The economic logic that once favored building in-house capacity is being flipped. When one person, armed with the right tech, can deliver faster, better, and cheaper, why even bother building the bureaucracy?
To understand what's really going on, we need to revisit one of the foundational theories of the modern firm. Nobel laureate Ronald Coase famously argued that companies exist to minimize the transaction costs of the market. But what happens when those transaction costs collapse?
For one thing, freelancers and fractionals will do more of the work companies used to do. They'll also earn more doing so.
'We're watching the boundaries of the firm blur in real time,' Bottoms says. 'Freelancers are building and directing AI workflows, managing entire deliverables end-to-end, and doing so with the speed and precision companies struggle to replicate. The scope of what they handle has grown dramatically.'
The data from Upwork also shows that freelancers doing AI-related work earn more than those who don't. The value is expanding, not just being redistributed.
This is where the lessons from Upwork's success with enabling both the seller and buyer side of the freelance market gets especially interesting. They've built infrastructure that works on both sides of the marketplace, enabling freelancers to offer more and empowering clients to ask for more. It's a flywheel, and it's spinning faster.
And this flywheel isn't shedding labor, it's asking more of it, giving us a hint of what we can expect from the labor force at large.
The era of acqui-growth
While broader M&A activity has slowed, some platforms are using the lull to make precise, well-timed acquisitions that we can read into like tea leaves.
Upwork's recent acquisition spree is case in point. The company has acquired Bubty, a contingent workforce management platform, and entered into an agreement to acquire Ascen, a tech-enabled employer-of-record startup. With these two moves, Upwork is signaling that its future is an enterprise workforce OS instead of just a marketplace. Today, the company also launched Lifted, a new subsidiary contingent workforce management platform,
CEO Hayden Brown is candid about the rationale: 'Upwork has always been best-in-class at providing independent contractor talent to large businesses. But to unlock much broader enterprise demand, we needed more than point solutions or partnerships; we needed deeply integrated, in-house capabilities that give our clients access to the full spectrum of contingent workforce models. Together, these acquisitions give our new enterprise subsidiary exactly that.'
The goal, according to Brown, is to become a contract-agnostic, digitally native solution for all contingent work that covers ICs, W-2s and everything in between. It's a massive market, worth an estimated $650 billion, and Upwork wants a much bigger slice of it.
And that they are going after with big acquisitions speaks volumes.
First, we can expect other platforms becoming service companies in their own right, ones that blend the lines between offering access, and offering outputs. Second, we're seeing that talent orchestration, especially at scale, requires more than matchmaking. It demands infrastructure and expertise, the rewards of which only get unlocked at scale.
Upwork's acquisitions signal a coming era of acqui-growth—where companies scale by absorbing entire functions, not assembling them piece by piece. Growth at the pace the future demands requires ready-built teams, systems, and workflows that know what to deliver and where.
We've actually already seen this very dynamic take shape in the freelance space itself. Across platforms, freelancers are taking on larger, more complex projects, coordinating with both AI and human collaborators to deliver full outcomes, not fragments.
Bottoms agrees, 'The freelancers coming to our platform today are showing up with their own teams, human and AI alike. We're seeing bands of freelancers operating like micro-agencies, coordinating with each other and their tools to deliver complete outcomes from day one.'
That means less time hiring, less risk, and more immediate output at larger scales. It also signals a return to the logic of Coase's original question: why build capacity in-house when the market can now deliver it more flexibly, more intelligently, and at lower cost, even if it means by means of acquisition? .
We're going from jobs to engines
The old model asked: What task could you do for us?
The new one asks: What kind of value engine are you bringing to the table?
And on Upwork, those engines are getting faster, smarter, and harder to compete with every day. To the companies still clinging to org charts like talismans, this might feel threatening. To the freelancers, entrepreneurs, and AI-powered builders already shaping the new economy however, it is an opportunity knocking on the door, and it's not waiting around for HR to return the call.