AI coding tools made writing code cheaper. They did not make software cheaper to own. If you hire an AI app development agency this year, you should pay less for routine code and ask for more proof that someone checked it.
That is our position after a year of using these tools on client work every day. The rest of this piece covers what changed and who wins. It also covers who loses and what to do before your next contract renews.
What changed in the last twelve months
Two years ago, AI help meant autocomplete. You typed a function name and the tool guessed the next few lines. Now the tools act as agents: they read a whole repository, edit many files, run the tests and open a pull request.
GitHub's Copilot documentation now covers handing an issue to a coding agent that works in the background. Cursor, Claude Code and OpenAI's Codex do similar things. The unit of work moved from a line to a ticket.
That shift matters because most agency work is tickets. A CRUD screen, an API endpoint, a form with validation, a database migration. These are exactly the tasks agents now handle well.
Where the savings are real, and where they are not
On our projects, AI tools typically cut hands-on time for routine tasks by a third to a half. Think admin screens, test scaffolding, data mappers and the boilerplate for a new endpoint. That is real money on a project that is mostly plumbing.
Total project time drops far less, usually 10 to 20 percent in our experience. Writing code was never most of the cost. Discovery, design decisions, messy third-party APIs, testing on real devices and app store review take as long as they did.
Some work got slower. Reviewing a 600-line pull request from an agent takes longer than reviewing 150 lines a person wrote, because nobody remembers the reasoning behind it. Teams that skip that review now ship bugs faster than ever.
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Who this helps and who it hurts
It helps founders with a clear spec. When the requirements are written down, an agency can hand routine tickets to tools and spend senior time on the hard parts. You get more done for the same budget.
It helps codebases with good tests. An agent can change code safely only if tests tell it when something broke. A codebase with solid tests on its core flows gets far more out of these tools than one with none.
It hurts agencies that sell headcount. If the model is five junior developers billed at full rate, the client now pays for typing a tool does in minutes. Those agencies will either cut rates or hide the savings.
It hurts founders who vibe code straight to production. A prototype built by prompting over a weekend can be a fine demo. It often has no server-side auth checks, secrets in the client and no tests at all.
It hurts the next developer if nobody reviews. Unreviewed AI code tends to be verbose and inconsistent from file to file. Whoever inherits it pays that bill in slower changes and more regressions.
Our prediction: hourly quotes for routine work fade by 2027
Within 18 months, we expect most agencies to quote standard features at a fixed price rather than by the hour. Clients can now see the gap between hours billed and work delivered. They will stop paying for that gap.
We also expect security questionnaires to ask how AI-written code gets reviewed. The NIST Secure Software Development Framework already expects documented review and testing for all code, whoever or whatever wrote it. We could be wrong on timing, but not on direction.
What to ask an AI app development agency this quarter
You do not need to ban AI tools or demand them. You need to know how they are used. Ask these questions before you sign or renew:
- Which tools do you use, and where does our code go? Confirm the tool's plan keeps your code out of model training, and get that in writing.
- Who reviews AI-written code before it merges? The answer should be a named person on every pull request, with no exception for small changes.
- What must pass before merge? Look for automated tests, linting, a dependency scan and a secret scan running in CI.
- How have your rates changed? If routine work got faster and the quote did not, ask where the time went.
- Who owns the output? The contract should assign all code to you, including AI-assisted code, with a warranty against knowingly copied licensed code.
Then do one thing yourself. Check test coverage on the three flows that make you money, such as signup, checkout and billing. If it is thin, spend this quarter's budget there first.
We use these tools daily and still put a person's name on every merge. CISA's Secure by Design guidance says the vendor, not the customer, should own security outcomes. That does not change because a machine wrote the first draft.
FAQ
Do AI coding tools make app development cheaper?
Somewhat. Routine coding typically gets a third to a half faster, but whole projects usually land 10 to 20 percent cheaper. Design, integration and testing still take human time, so treat any quote promising a far bigger cut with suspicion.
Is AI-generated code safe to put in production?
It can be, if it goes through the same review, tests and security scans as human code. The risk is not the tool itself but skipping review because the code looks finished. Ask your agency to show that review on every merge.
