Generative AI Development Company: How to Choose One

A generative AI development company builds custom LLM-based systems into your product: applied features, agent pipelines, the retrieval layer that feeds them, and the evaluation suite that grades them. The real ones own that eval suite, show working code, name their model layer, and deploy inside your cloud, not theirs.

**Key numbers**

- 72% of organizations report using generative AI in at least one business function, up from 65% a year earlier and 33% in 2023 (McKinsey, State of AI 2025, n=1,993 across 105 countries).
- A Builder Pod is $5,000/month, a Growth Pod is $10,000/month, Enterprise is custom, all month-to-month with a 30-day cancellation notice.
- A loaded US senior engineer runs roughly $250,000 or more a year once salary, benefits, and recruiting are counted, and a typical in-house hiring cycle runs 3-6 months.
- A matched pod is working inside five business days and ships the first real feature in week one or two.
- Two production examples in the current portfolio, a compounding-pharmacy platform and a medical-billing audit platform, run under HIPAA-aligned controls with a signed BAA.

## The Question This Search Actually Asks

Adoption stopped being the question some time ago: McKinsey's 2025 State of AI survey puts generative AI use in at least one business function at 72% of organizations, up from 33% in 2023. That curve is why the market is now crowded with vendors calling themselves generative AI development companies, most of them prompt-engineering shops wrapping a public API.

Nobody types "generative AI development company" because they want a definition. They type it because they are staring at five vendor decks that all say roughly the same thing (agile, expert, AI-powered, results-driven) and they need a way to tell which one can actually ship a working system versus which one can only ship a demo.

The honest split in this market runs along one line: does the vendor own the engineering discipline underneath the model call, or did they buy an OpenAI API key and call it a product. A wrapper shop can build you a chatbot in a weekend. A real generative AI development company can tell you how they will know the chatbot is wrong before your customer does, what happens the day the underlying model gets deprecated, and where the code lives after the invoice is paid.

This guide gives you the checklist to tell the two apart, what a real build looks like from the inside, and what it should cost you, stated as an exact number rather than a range that hides behind "it depends."

## What a Generative AI Development Company Actually Builds

The term covers a wide range of work, and a vendor that is vague about which part they do is usually vague on purpose. In practice, the deliverables split into a few buckets:

- **Applied LLM features inside an existing product** - a drafting assistant, a search-and-summarize layer, a classification step in a workflow that used to be manual.
- **Agent systems** - a pipeline that takes an action (books a slot, files a claim, flags a payment) rather than just returning text, with guardrails on what it is allowed to do.
- **Data pipelines that feed the model** - retrieval layers, embeddings, ETL that turns messy source data into something a model can reason over accurately.
- **The evaluation and monitoring layer** - the part most wrapper shops skip, that tells you whether the system is getting better, worse, or drifting once it's live.

An "ai ml development company" and a "gen ai development services" firm are usually the same vendor describing itself two different ways depending on who is asking. What matters is not the label, it's whether the team behind the label can point to shipped, tested code in a domain that looks like yours. Our own portfolio runs six regulated, data-heavy builds, from a 25-million-record voter and donor platform to an air-gapped fraud detection engine that makes zero external calls, and every one of them is described with the stack and the outcome, not adjectives. That is the level of specificity to expect from anyone quoting you.

## The Four-Item Checklist Before You Sign Anything

Ask these four questions in the first sales call. A vendor that answers them cleanly, with specifics, is worth a second conversation. A vendor that answers with a deck slide is not.

### 1. Do they own the evaluation suite?

Before any model output reaches a user, someone needs a repeatable way to grade it: a labeled test set, a scoring rubric, a regression suite that runs every time the prompt, the model, or the retrieval layer changes. Ask the vendor to describe their eval process in one sentence with a concrete detail in it - "we run 200 labeled cases against every model version before it ships" is a real answer, "we test it thoroughly" is not. If they cannot describe how they measured quality on their last three builds, they are not measuring it on yours either. They are shipping vibes.

### 2. Do they show real code and real architecture?

A generative AI development company that cannot open a repository, a diagram, or a pull request in a sales conversation is selling you a story instead of a system. Ask to see an architecture diagram from a past build, not a marketing screenshot, and ask what a code review looked like on it: who owned the pull request, what tests ran in CI, whether schema changes went through reviewed migrations. If AI-generated code went into production without a named engineer reviewing it, that is the tell you needed.

### 3. Do they name the LLM layer, and how would they swap it?

This is the question that separates an engineering team from a reseller. Ask which model the system runs on today, and what changes the day that model gets deprecated or a better one ships. The correct architecture puts the model behind a single interface in your codebase, so a model swap is a config change and a re-test, not a rewrite of the application. We describe this directly in our [FAQs](/faqs): when a model we're using gets deprecated, we move to a newer one, because the model sits behind one interface rather than being wired into a dozen places in the code. If a vendor cannot describe an equivalent boundary in their own architecture, you are buying a system with a single point of failure baked in, and that point of failure is a company you don't control (OpenAI, Anthropic, or whoever else) deciding to sunset an endpoint.

### 4. Do they deploy inside your own cloud or VPC?

Ask where the code and data live once the project ships. If the answer involves a vendor-hosted dashboard, a vendor-managed database, or any dependency that keeps running only as long as you keep paying that specific vendor, you have a hosting contract dressed up as an engineering relationship. The better answer: everything ships into your own repository and your own cloud account from week one, so if the vendor disappeared tomorrow, the system keeps running. That's the standard described on our [security](/security) page, and it is the standard worth holding every vendor to, not just us.

Here is what that interface boundary looks like in practice, and why it makes the deprecation question a non-event instead of a re-architecture.


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## How a Real Build Actually Runs, Start to Finish

The checklist above tells you what to look for. Here is what the process looks like once you've picked a team.

1. **A single scoping session.** One conversation to understand the problem, the data, and the constraints (regulatory, technical, or timeline). No multi-week discovery phase.
2. **A free clickable prototype.** Built before any commitment, so you can evaluate real work rather than a proposal. You keep it if you walk away.
3. **The pod starts.** Working inside five business days, with the first shipped feature landing in week one or two, not month three.
4. **Daily standups, weekly ships.** Standups happen in your existing Slack or Teams channel. Every week, something real merges.
5. **Handover.** Repository, database migrations, deploy pipeline, and documentation, all in your accounts, all along.

This is the model behind our [pods](/pods) page, and it is the same standard we'd hold any vendor to: daily visibility, weekly proof, and nothing locked to a system you don't own. If you want a broader comparison of how consulting firms structure engagements against this pod model, our rundown of [top AI consulting firms](/blog/top-ai-consulting-firms) walks through the field.

## What a Real Build Costs, and Why Agency Quotes Stay Vague

Most agencies quote generative AI work the way they'd quote a custom software project: a scoping call, a statement of work, a range that widens the moment requirements shift, and a per-hour or per-milestone billing structure that makes the final number hard to predict. That vagueness isn't always dishonesty, it's structural: an hourly or SOW-based engagement has an incentive to expand scope, because scope expansion is the business model.

We run this differently. Pricing is capacity, not hours, published, and identical for every buyer:

| Plan | Price | Build tracks | Team | Cadence |
|---|---|---|---|---|
| Builder Pod | $5,000/month | 1 active | Pod lead + 2-engineer bench | Weekly ship, async updates |
| Growth Pod | $10,000/month | 2 concurrent | Pod lead + 3-engineer bench | Weekly ship, bi-weekly strategy call |
| Enterprise Organization Pod | Custom | 3+ parallel | Dedicated senior lead + 3-8 engineers | Weekly ship, executive roadmap reviews |

All three run month-to-month with a 30-day cancellation notice, no per-hour billing, and no change orders. Full detail is on the [pricing](/pricing) page. For comparison, a single loaded US senior engineer runs roughly $250,000 or more a year once salary, benefits, and recruiting are counted, before the 3-6 months it typically takes to fill the role. A Builder Pod costs a fraction of one month's worth of that fully loaded salary and starts working the same week you sign.

If the vendor you're evaluating cannot give you an exact number on the first call, that is itself a data point. Ask what a comparable build cost their last three clients, and if the answer is "it varies," ask why it varies more than a fixed monthly rate would.

## When a Generative AI Development Company Is the Right Call, and When It Isn't

A subscription engineering pod is the right fit when:

- You have a defined build (a feature, a pipeline, a portal) and need senior engineering capacity now, not in a quarter.
- The domain is regulated or data-heavy (healthcare, fintech, public sector) and the build has to pass a compliance review, not just a demo.
- You want the work in your own repository and cloud account from day one, with no vendor lock-in on the backend.
- You need weekly, visible progress rather than a black-box delivery date three months out.

It's the wrong fit when:

- You need a single technical decision-maker embedded in leadership meetings long-term, rather than a build team. That is a different kind of engagement, built around strategic ownership rather than a shipping track, and it is worth naming that difference before you sign anything.
- The work is genuinely a one-off contractor task with no ongoing capacity need. A freelancer or a short scoped SOW may be cheaper for a two-week job.
- You want to own the hiring and management of a permanent internal team long-term. Staff augmentation is a bridge to that state, not a substitute for it, and it is worth weighing against the true cost and timeline of hiring directly before choosing either path.

## A Vendor Vetting Checklist You Can Take Into the Next Call

- Ask for the eval process on their last shipped model feature, with a specific number attached (test set size, scoring method).
- Ask to see an architecture diagram from a real project, not a template.
- Ask which model the system runs on and what changes the day it's deprecated.
- Ask where the code and infrastructure live once the engagement ends.
- Ask for the exact price, not a range, and what happens to that price if scope shifts mid-build.
- Ask what a compliance-relevant claim actually means (a signed BAA and HIPAA-aligned controls is a real answer; "HIPAA certified" is not a real thing to claim, since HIPAA has no certification to hold).
- Ask how fast they can start, and hold them to a specific week, not "soon."

If you'd rather work from a ranked shortlist of vendors than run this checklist against five cold outreach emails, our [top AI consulting firms](/blog/top-ai-consulting-firms) piece is built for that comparison. This article is for vetting whoever's already on your shortlist.

## The short version

- Adoption is no longer the question: 72% of organizations now use generative AI in at least one business function, up from 33% in 2023, which means the vendor pool is crowded with wrapper shops riding that curve.
- Vet any vendor on four things: an evaluation suite with real numbers, visible architecture and code, a named model layer with a swap plan, and deployment inside your own cloud or VPC.
- A model deprecation should be a config change and a re-test, never a rebuild, if the architecture puts the model behind a single interface.
- Pricing should be exact, not a range: $5,000/month, $10,000/month, or custom, month-to-month, no per-hour billing, and code that lives in your repository from day one.