AI app development: In-house vs. Outsourcing

Apps contribute significantly to the success of organizations. A recent NewVantage study reports that more than 91% of top businesses in the US invest in AI. For companies who want to invest in AI app development, choosing in-house vs outsourcing is a big consideration. 

AI apps simplify everyday operations, augment the growth process, and push a company to accomplish its goals. Amazon Style, for example, is an AI-powered store set to start a new wave of modernization in the fashion industry. Its features like smart scan, style recommendation, and smartphone shopping apps add convenience, save time, and the shopping experience of their customers.

AI-powered applications determine the industry leaders. Starbucks, Nike, and Netflix have set the standard for brands and businesses through their investments in AI. 

So, should you build in-house or outsource? Here we cover all bases to help you make an informed decision.  

What is AI app development? 

AI app development describes the rapid adoption of AI technologies in developing mobile, desktop, cloud, and web applications. Advancements include instant language translation, facial recognition security, and improved customer relationship management with chatbots. The benefits of AI applications are clear across all industries, such as marketing, education, healthcare and many more. 

In-House App Development

During in-house app development, companies assign their own designers, developers, project managers, QAs, and others directly to the project application development. It sometimes means hand-picking everyone involved in the project. The project managers must have the necessary technical and soft skills, while the company executives also need some level of technical expertise to make good decisions.


  • Quality control is much higher
  • Greater agility and flexibility
  • Better talent development 


  • More expensive and riskier
  • It takes time to build a team from scratch
  • Limited access to talent for hire

Outsourcing App Development 

Outsourcing means partnering with another company specializing in the field of AI app development. You can hire an experienced team from established firms to fulfill your requirements. The company you’ve partnered with assigns its own designers, developers, project managers, QA, and others and provides deliverables. An outsourcing partnership can also include deployment, training, and maintenance services if necessary. Your involvement in the development process is limited while outsourcing. 


  • Reduced operating costs
  • Freedom to focus on core business
  • Can access talent from a wider and more specialized pool


  • Overcoming communication barriers 
  • Might reduce quality control
  • Lack of employee upskilling

Comparing In-House vs Outsourcing App Development

inhouse vs outsourcing AI app development
In-house vs Outsourcing AI Application Development

Budget, talent availability, and quality control are important to consider. Outsourcing tends to be less costly than in-house development. With proper estimation, you can keep your budget on track by outsourcing. 

Companies are limited to using the talent they hire while developing apps in-house. Outsourcing allows you to work with a wider talent pool. The ability to control different stages of the app projects, freedom to work at your own pace, and the prospect of having a skilled team, makes in-house development appealing for certain businesses.

Here are some important questions to ask before selecting your outsourcing partner.

Questions about the company

  • Who were your previous clients?
  • What are your criteria when hiring developers?
  • Where is your development team located?
  • Do you provide maintenance and support after launch?
  • What development methodology do you use?

Questions about the project

  • How will I be involved in the development process?
  • What tools do you use?
  • Will developers work exclusively on my project?
  • Do you do UX design?

Technical details

  • How do you ensure data privacy? 
  • Do you provide quality assurance?
  • What’s your pricing model?

Why choose Fusemachines for AI App Development? 

  • Over a decade of experience in AI  
  • Strong and capable development team with hundreds of completed projects 
  • Ideal for long-term partnerships and delivering on a multitude of projects  
  • Can work with technical and non-tech people on building data culture in a company

Bottom Line

Both in-house and outsourcing have benefits. In-house development might be ideal for companies prioritizing project control and employee upskilling over expenses. On the other hand, outsourcing is great for businesses on a budget and reduces the technical complexities of building applications. It is best to understand a bit more about AI applications before choosing one of the options. Download our eBook on AI app development for an in-depth analysis. 

Want to learn more about how Fusemachines and AI can help your company? Click here