Aditya Chopra isn’t looking for a new job, but recruiters keep calling him anyway. The 36-year-old data science specialist works in artificial intelligence, perhaps the most coveted experience on the planet after OpenAI demonstrated the breakthroughs of ChatGPT. Chopra, who works outside New Delhi, sees friends in the field get pay hikes of 35-50% each time they switch jobs. “There’s a real shortage of data and AI talent,” he said.

An AI hiring frenzy is ricocheting around the world, from Silicon Valley to Europe, Asia, Africa and beyond. While tech giants like Google and Baidu dangle top-notch packages for the engineers to build their own AI engines, companies in almost every other field — from healthcare and finance to entertainment — are staffing up, too, to avoid getting blindsided by shifts in their industries.

India, perhaps more than any other country, illustrates how the rush for talent is outstripping supply. The country of 1.4 billion people has long been the backoffice for the tech industry, a source of reinforcements for any emergency. But now even the world’s most populous nation is running out of the data scientists, machine-learning specialists and skilled engineers that companies are looking for.

There’s an “insatiable need for talent”, said Rahul Shah, co-founder of WalkWater Talent Advisors, a headhunter for top-level workers. “AI can’t be outsourced; it’s core to the organisation.”

Recruitment stories verge on the absurd. In one search Shah’s firm just handled, the new employer more than doubled a candidate’s pay. Freedom Dumlao, chief technology officer of Flexcar, interviewed one engineer who said a rival suitor had offered him a BMW motorcycle as a sign-on bonus. “That’s a line I’m not comfortable approaching,” Dumlao said.

India’s tech industry is built on a plentiful supply of affordable workers. Companies like Tata Consultancy Services invented the model for modern outsourcing, in which Western companies tap engineers halfway around the world to handle support, services and software, typically at a fraction of the cost of local workers. There are now more than five million people employed in tech services in India, according to the trade group Nasscom.

Hiring by the thousands

Powerhouses like Google, Microsoft and Amazon.com set up their own operations in India, hiring locals by the thousands. Google, now part of Alphabet, started with five employees in the country in 2004 and now employs nearly 10 000.

But this seemingly endless supply of labour is running short in critical fields. There are about 416 000 people working in AI and data science in the country — and demand for another 213 000, according to Nasscom’s estimates. “The proportion of unfilled job roles is approximately 51% of the current installed talent base,” it said in a February report, flagging the crunch as a risk to growth.

It’s likely to get worse. India added 66 tech innovation centres, so-called global capability centers or captives, last year taking the total to nearly 1 600. These GCCs that used to handle tasks like IT support and customer support have morphed into in-house centres for business-critical technology — like AI. In the first three months of 2023, asset manager AllianceBernstein Holding, car rental company Avis Budget Group, entertainment conglomerate Warner Bros Discovery and aircraft engine maker Pratt & Whitney set up R&D hubs in Bangalore, joining the likes of Goldman Sachs Group and Walmart.

“ChatGPT has driven the larger domain of artificial intelligence out of stealth mode,” said Vikram Ahuja, co-founder of ANSR Consulting, which helps design and establish technology centres for corporations.

Last year, Dallas-headquartered ANSR set up 18 such captives in India; Ahuja expects that number to hit 25 this year. “Many enterprises which have India captives are accelerating their AI road map to derive a competitive edge.”

Companies large and small are trying to figure out how AI will affect their fates. Can ChatGPT predict future demand with newfound accuracy? Will deep learning technologies prove better at medical diagnosis than any doctor today? Could trading algorithms be fine-tuned to the point finance companies with the best technologies will drive their rivals out of business?

“The talent crunch is going to worsen in the next year or two,” said Biswajeet Mahapatra, principal analyst at Forrester Research.

India has the second largest pool of highly skilled AI, machine learning and big data talent, according to the February report by Nasscom, after the US. It produces 16% of the world’s AI talent pool, placing it among the top three talent markets with the US and China.

Dumlao of Flexcar, a Boston-based car subscription start-up, says that’s not enough. He has been hunkering down in Bangalore for the past three months trying to assemble a team of data engineers and computer vision specialists for the start-up’s data science hub in the city. Flexcar’s team of 60 engineers helps build AI applications to automatically detect damage when vehicles are returned. The start-up has embraced ChatGPT and is piloting a chatbot to help technicians diagnose and fix vehicles by querying trained bots.

“Bangalore has incredible data engineering talent and the AI talent hunt is only going to intensify,” said Dumlao. The tricky thing is to persuade prized engineers that his start-up is their most attractive option. “The freshest ideas and the newest innovations will sprout wherever there’s a concentration of talent,” he said.

This being India, many workers are trying to retrain themselves to land a coveted job in AI

Dumlao’s competitors come in all shapes and sizes. Chilean retailer Falabella is the first Latin American company to open a captive in India for data analytics, AI and machine learning. “We have to compete with the best of the best,” said Ashish Grover, its Santiago-based CIO. The efforts are paying off: a personalised customer platform now accounts for over half the incremental sales from digital targeting. An AI-fuelled recommendation engine has driven three times more conversions on its mobile app.

Home improvement retailer Lowe’s Cos’ captive tech centre in Bangalore helps embed AI into its products, and all its technology will be built “AI first”, said Ankur Mittal, MD of Lowe’s India. For instance, the team’s predictive algorithms help decide pricing, and fine-tune search features on Lowes.com. The Bangalore hub’s AI-powered computer vision uses videos and imagery from store cameras to help address shoplifting and analyse store footfalls.

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This being India, many workers are trying to retrain themselves to land a coveted job in AI. Data engineer Deepak Kapoor, who works for a start-up called Thinkbumblebee Analytics, is studying up on computer vision and large language models to move into deep learning, where job opportunities are plentiful. He thinks he could easily double his salary in a city like Bangalore.

Mahapatra, Forrester’s adviser to global CIOs, anticipates years of rising demand for skilled workers. India is certain to benefit from the rush to higher employees who understand this new world.