In-House vs Staff Augmentation vs Agency for AI Projects

Frequently Asked Questions

01.Is staff augmentation or an agency better for a first AI project?

It depends on whether you have an internal technical owner. Staff augmentation adds engineers who work under your direction, so it only works if someone on your side can set priorities and judge model quality. An agency directs its own team toward an agreed outcome, which suits a first prototype when nobody in-house can do that yet, provided the contract defines acceptance criteria and handover.

02.Can I start with an agency MVP and bring the work in-house later?

Yes, and it is a common path. Deloitte found that nearly three-quarters of organizations it surveyed had insourced portions of previously outsourced scope within five years (Deloitte Global Outsourcing Survey, December 2024). Plan the move at signing: put the insourcing date, the handover runbook, repository and model account transfer, and a signed copyright assignment in the agency contract.

03.Who owns the code and evaluation set an agency builds for me?

Under US copyright law, a commissioned work is a work made for hire only in nine listed categories and only with a signed written agreement, and custom code rarely fits them cleanly. A transfer of copyright is valid only if it is in writing and signed by the owner. Get a signed assignment covering code, prompts, evaluation sets and documentation, and confirm the position with counsel.

04.Does hiring an agency move EU AI Act obligations to the agency?

Generally no. The EU AI Act defines a provider as a person that develops an AI system or has one developed and places it on the market or puts it into service under its own name or trademark. If the product ships under your brand, the provider duties usually stay with you, so the contract should require the agency to supply the documentation and technical access you need.