There's a conversation happening in every boardroom right now: "Should we hire that agency that promises faster delivery with AI?" It sounds compelling. Faster timelines. Lower costs. Cutting-edge technology. What's not to love?
Everything, potentially.
I've spent the last year watching the development landscape shift dramatically, and I need to share something that most agencies won't tell you: the way a studio uses AI reveals everything about whether they actually care about your business outcomes or just their profit margins.
The New Snake Oil
Let me be direct. Some agencies have discovered they can dramatically cut their labor costs by having junior developers prompt AI tools to generate entire codebases. They pass these savings on to... themselves. Meanwhile, you get a product that looks professional on the surface but has nobody who truly understands how it works under the hood.
I call this "vibe coding" – and it's becoming disturbingly common.
Here's how you can spot it: Ask the development team to explain their architectural decisions. Ask them why they chose a particular approach over alternatives. Ask them what trade-offs they considered. If the answer involves uncomfortable silence, vague hand-waving, or "that's just how the framework works," you're looking at a team that's outsourced their thinking to a machine.
Why This Should Terrify You
When an agency builds your application without deeply understanding the code, several things become inevitable:
Your maintenance costs will explode. That "affordable" initial build becomes a money pit when every bug fix requires someone to reverse-engineer what the AI originally generated. I've seen clients pay three times their original budget just to make basic modifications because nobody at the agency could explain how the authentication system worked.
You become hostage to that agency. If they don't understand the code, you certainly won't be able to bring it in-house or transition to another partner. You're locked in, and they know it.
Security vulnerabilities hide in plain sight. AI generates plausible-looking code, but it doesn't understand your specific security requirements, compliance needs, or the nuances of protecting your users' data. Without human expertise reviewing every line, you're essentially gambling with your customers' trust.
Scaling becomes a nightmare. That MVP that worked fine for 100 users? It might completely collapse at 10,000. AI-generated code often looks correct but misses the performance considerations that only come from experience and deep understanding.
The Question You Need to Ask
Before signing with any agency or studio, ask this: "How do you use AI in your development process, and how do you ensure your team understands every line of code they ship?"
The right answer sounds something like: "We use AI to accelerate our workflow – generating boilerplate, exploring approaches, speeding up research – but our developers understand and can explain every piece of code we deliver. We review, test, and take full ownership of everything we build."
The wrong answer is anything that sounds like: "AI lets us move faster and keep costs down." That's agency-speak for "we've replaced expertise with prompts."
The Agencies That Actually Have Your Back
The best studios I know have embraced AI thoughtfully. They're using it to become more valuable to clients, not less. They use AI to:
- Research solutions faster so they can present you with better options
- Handle tedious boilerplate so they can focus on your unique business logic
- Explore multiple implementation approaches before recommending the best fit
- Accelerate learning on new technologies relevant to your project
But critically, they're not using AI to replace the fundamental expertise you're paying for. They can still whiteboard your architecture. They can still debug production issues at 2 AM. They can still explain exactly why they made every significant decision.
The Real Cost Calculation
That agency quoting you 40% less than the competition? Do the math on what happens when:
- A critical bug takes 3x longer to fix because nobody understands the codebase
- You need to pivot a feature and discover the "modular" architecture is actually spaghetti
- A security audit reveals vulnerabilities that require a partial rebuild
- You want to switch vendors and learn the documentation is AI-generated nonsense
The cheapest option rarely stays cheap. The fastest timeline rarely stays fast.
What This Means for Your Next Project
I'm not saying avoid agencies that use AI. Quite the opposite – in 2025 and beyond, you want partners who leverage modern tools effectively. The red flag isn't AI usage; it's AI dependence.
Look for partners who:
- Can articulate their development philosophy beyond "we use the latest tools"
- Introduce you to senior developers who will actually work on your project
- Welcome technical questions and answer them with clarity and confidence
- Have a track record of maintaining and evolving projects over years, not just launching them
- Treat AI as one tool among many, not as a replacement for human judgment
Your business deserves a development partner that invests in truly understanding your needs, your users, and the code that serves them both. Anything less isn't a partnership – it's a transaction that benefits only one side.
The agencies that will thrive in the AI era are the ones that use these tools to become better partners, not cheaper vendors. Choose accordingly.