The Rise of AI-Generated UGC: How Startups Are Replacing Agencies With Automation in 2025

With AI-powered engines like Tryholo.ai, the success of this shift is inevitable. After all, founders now have more power in terms of generating ad-ready content independently. This means that founders no longer have to worry about huge overhead costs for the sake of remaining agile in a highly competitive market.

Why UGC Became the Default Creative Format

The reason why UGC is so successful is that it looks and feels very close to how customers naturally communicate online. With a format that’s authentic, informal, and rooted in real product experiences, startups are able to compete in saturated markets more effectively because of the help of UGC. 

This is a very powerful strategy since it is based on familiarity. However, the demand for UGC has led to a rise in operational costs. Agencies raised their rates because of higher volume and quicker turnaround expectations. As a result, a lot of startups struggled to maintain the creative velocity they needed to make their efforts successful. As a result, the challenge then became addressing the gap between what founders needed and what their budgets allowed.

The Acceleration of AI-Generated Content

AI-generated UGC have been embraced by startups because they help solve operational problems that slowed them down before 2025. Since generative AI has evolved so much in 2025, it is now able to support multi-format creative production.

The first problem that AI-generated UGC has solved is the dependency on human talent pipelines. This has led to lower operational costs, since human talent pipelines were quite expensive.

The second problem solved is that founders are now able to test more variants in shorter time frames. Performance marketers are constantly emphasizing that this is essential, and it’s a good thing that AI-generated UGC was able to step in and help in this aspect.

Lastly, output that is aligned with brand guidelines are now consistently produced. This is true even despite the absence of large creative teams.

Because of AI-generated UGC, businesses can now save on both time and money. After all, it has become way easier to generate content daily without going through lengthy agency briefs or revision cycles.

How Startups Use AI to Replace Traditional Creative Pipelines

Contrary to what many believe, automation is not about eliminating human creativity. Instead, AI is all about streamlining repetitive aspects of production. This is largely helpful to startups with an early-stage marketing team. With limited capacity, an early-stage marketing team would not be able to attend to all important things like balancing growth, product, and customer engagement at the same time that they are working on the repetitive aspects of production.

With AI, marketing teams can focus on iteration, testing, and strategy so that the creative pipeline remains active even when internal resources are stretched.

What This Means for the Future of Startup Marketing

Content creation has become more streamlined and predictable because of AI-generated UGC. It’s not unlikely that the output from AI-generated UGC will become completely indistinguishable from traditional UGC. This is all thanks to how quickly tools are evolving these days.

By the end of 2025, it is expected that the majority of early-stage brands will be able to maintain hybrid pipelines where human creativity and AI efficiency coexist. After all, the goal of AI is not to eliminate human creativity. Instead, it seeks to enhance it and make it more efficient.

With AI-generated UGC, huge operational costs will be removed from the equation. After all, the hybrid model enables startups to operate with the creative capabilities of a full-scale agency without worrying about costs. Tools like Tryholo.ai represent an early example of how automated creative engines are shaping this new era.