AI-Native Startups Hire Fewer Junior Workers and More Senior Talent, Harvard Study Finds

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.

Researchers from Harvard Business School and INSEAD said in a working paper published in June that AI-native startups are building smaller, flatter organizations while hiring fewer entry-level workers and more experienced technical talent than traditional startups.

The study, titled “AI-Native Firms,” analyzed Y Combinator startups from 2020 through 2024 and a broader group of U.S. venture-backed companies founded during the same period. The researchers defined AI-native firms as companies that use artificial intelligence both to improve employees’ productivity and to embed AI directly into the products they sell.

The researchers found AI-native startups are about 25% smaller than comparable non-AI startups while employing roughly 13% more engineers. They also have about 15% fewer entry-level employees and managers, while the share of senior workers is about 20% higher.

Don’t Miss:

Despite operating with smaller teams, the companies achieve valuations similar to non-AI peers, suggesting they generate more value with fewer employees.

Changing Hiring Patterns

According to the study, AI is reshaping hiring by reducing the need for large junior workforces while increasing demand for experienced technical employees. The authors found AI-native companies are more likely to hire graduates from elite universities, are concentrated in Silicon Valley and employ a workforce that skews male.

The researchers said AI is improving productivity in two ways. Companies are using AI internally to help employees complete tasks such as coding, sales and design more efficiently, while also building AI directly into products so customers can perform work that previously required human teams.

The authors warned that if AI adoption continues to accelerate unevenly, it could widen performance gaps among workers and entrepreneurs rather than expanding access to opportunities.

The findings add to a growing debate over AI’s impact on employment. Last month, Microsoft Corp. Vice Chair and President Brad Smith said entry-level jobs are already facing pressure from automation but argued AI would reshape work over decades rather than replace workers overnight.

Story Continues

International Monetary Fund Managing Director Kristalina Georgieva has also urged policymakers to ensure AI’s economic benefits are broadly shared as the technology transforms labor markets.

Photo courtesy: Shutterstock

Read Next:

Building Wealth Across More Than Just the Market

Building a resilient portfolio means thinking beyond a single asset or market trend. Economic cycles shift, sectors rise and fall, and no one investment performs well in every environment. That’s why many investors look to diversify with platforms that provide access to real estate, fixed-income opportunities, precious metals, and even self-directed retirement accounts. By spreading exposure across multiple asset classes, it becomes easier to manage risk, capture steady returns, and create long-term wealth that isn’t tied to the fortunes of just one company or industry.

Arrived

Backed by Jeff Bezos, Arrived Homes makes real estate investing accessible with a low barrier to entry. Investors can buy fractional shares of single-family rentals and vacation homes starting with as little as $100. This allows everyday investors to diversify into real estate, collect rental income, and build long-term wealth without needing to manage properties directly.

FarmTogether

Farmland has historically held its value through market volatility and delivered returns uncorrelated to stocks and bonds. For accredited investors, FarmTogether offers direct access to high-quality U.S. farmland starting at $15,000 — fully managed, with no landlord headaches.

Fundrise

Private real estate and private credit can add income and stability to a stock-heavy portfolio. Fundrise offers access to diversified private real estate and credit strategies through an easy-to-use platform, with professionally managed portfolios designed to generate passive income and long-term growth.

Realberry

Institutional-quality real estate has traditionally been difficult for individual investors to access. Realberry gives accredited investors direct access to private real estate opportunities backed by a team with 35 years of experience, $3.4 billion in assets under management, and $481 million in cumulative distributions paid to investors as of Q4 2025, according to the company. With a portfolio spanning 13 million square feet across seven U.S. states, Realberry focuses on acquiring, developing, and managing real estate with an emphasis on long-term value creation while its principals often invest alongside clients to help align interests.

Immersed

Immersed is building technology for the future of work through spatial computing. Known for its AR/VR productivity platform that enables users to work across multiple virtual screens, the company has grown to more than 1.5 million users worldwide. Immersed is also developing Visor, a lightweight headset designed specifically for professional productivity, positioning the company at the intersection of remote work, extended reality (XR), and next-generation computing.

BluSky AI

The rapid adoption of artificial intelligence is creating significant demand for data centers, power, and compute infrastructure. BluSky AI is building modular AI data centers designed to support next-generation AI workloads while aiming to reduce deployment timelines compared to traditional facilities. For investors looking beyond AI software and applications, the company offers exposure to the infrastructure layer that makes artificial intelligence possible.

Miso Robotics

Robotics and automation are becoming increasingly important tools for businesses facing labor shortages and rising operating costs. Miso Robotics develops AI-powered kitchen technology that is already being deployed in restaurant environments, with products designed to help operators improve efficiency and streamline operations. As artificial intelligence expands beyond software and into real-world applications, the company is positioning itself at the intersection of robotics, automation and the future of food service.

Vinovest

Fine wine and rare whiskey have historically moved independently of the stock market, making them a compelling alternative asset. Vinovest manages authenticated, insured portfolios of investment-grade wine and whiskey starting at $5,000 — sourcing, storage, and insurance all handled for you.

EquityMultiple

For accredited investors looking beyond stocks and bonds, EquityMultiple provides access to vetted commercial real estate deals starting at $5,000 , with only ~5% of opportunities passing their due diligence process.

Mode Mobile

Mode Mobile is changing the way people interact with their phones by letting users earn money from the same apps and activities they already use every day. Instead of platforms keeping all the advertising revenue, Mode Mobile shares a portion back with users who engage with content, play games, and scroll on their devices. Named one of Deloitte’s fastest-growing software companies in North America, the company has built a large beta user base and is scaling a model that turns everyday smartphone usage into a potential income stream.

Tags: