New talent war: How AI is pushing the boundaries in the IT sector

The proliferation of artificial intelligence (AI) and AI-driven activities is causing a shift in compensation in the information-technology (IT) sector. While the penetration of AI is widely expected to lead to job losses and lower labour intensity across industries, there is a large and widening demand-supply gap within the AI ecosystem itself. The demand for AI developers and users skilled enough to develop and run AI-based algorithms and applications far outruns the supply of individuals capable of performing these tasks. As a result, IT companies are trying to hire AI-capable talent and setting up upskilling programmes. Along with the rest of the world, India will struggle to bridge the demand-supply gap. 

 

Consequently, compensation packages for top AI researchers are skyrocketing. OpenAI’s Sam Altman has complained about Meta offering packages running into over $100 million in order to induce OpenAI’s researchers to jump ship and join the social-media giant. Meta has invested $14.3 billion in data-labelling startup Scale AI, and hired its cofounder, Alexandr Wang, to lead the new Meta “superintelligence” team. Meta is by no means the only Silicon Valley company making such massive investments. Google DeepMind, Anthropic, and X are also offering eight- and nine-figure packages to bolster respective AI units. Also, Silicon Valley isn’t the only place where programmers with AI-specific skills are in high demand. China’s giants are also making enormous investments with Baidu, AliBaba, DeepSeek, and the like, offering salaries “with no ceiling” for graduates recruited directly from university. Indeed, China arguably has an even stronger focus on AI, with over 4,500 Mainland (China) corporations working across the AI value chain. 

 

Things changed even more after ChatGPT publicly launched in November 2022. That was followed by the release of other large-language models (LLMs) alongside the rapid scaling up of AI-capable infrastructure. Gemini, Grok, Llama, and Claude all hit the market soon after ChatGPT. The next breakthrough came with the release of China’s DeepSeek in January this year. DeepSeek lowered the barriers for LLM-related work. It was developed for a fraction of the reported costs of ChatGPT and Llama and thus “democratised” development. However, the bottleneck remains in human talent. Baidu, for instance, is boosting its AI research team by 60 per cent this year to carry out research across 23 core businesses and 11 research areas, focusing on fields such as LLMs, machine learning, and speech technology. Over the next five years, the Chinese giant says it will “cultivate 10 million AI professionals for society”. 

 

That projection of 10 million by Baidu may not be hyperbolic. McKinsey forecasts China will require at least six million AI professionals by 2030, but could face a shortfall of four million. The requirements for AI professionals have evolved beyond technical skills, with employers also looking for professionals with the ability to work across sectors and identify commercial opportunities. In India, AI job openings are projected to surpass 2.3 million by 2027, according to a study by Bain & Company. But the AI talent pool is expected to grow to only around 1.2 million, leaving a gap of over 1 million roles that would require reskilling and upskilling initiatives. Addressing the talent gap will require educational institutions to step up, with an emphasis on creating AI-related courses. The corporate sector and policymakers have to collaborate and coordinate such efforts if India is to be a front-runner in AI.