Feb 14, 2025
William Markow
The AI workforce is facing booming demand, rapid skill evolution, and fierce competition across the country – how can organizations and individuals keep up?
Since generative AI burst on the scene in late 2022, there has been endless debate on the impact AI will have on the workforce. Despite the constant drumbeat of AI punditry, however, many fundamental questions about AI’s true effect on the workforce remain unanswered. This leaves both organizations and individuals in the dark when it comes to navigating the current and future state of AI in the job market.
Amidst this AI-fueled uncertainty, one trend has been crystal clear: demand for workers with AI skills is booming. The release of ChatGPT in 2022 wasn’t the origin of AI job demand – AI was a growing field for years before that – but it did catalyze a mad dash among employers to scoop up skilled AI workers. But as AI matures and organizations begin to take a more targeted approach to their AI initiatives, the AI job market is becoming more nuanced. This requires stakeholders across the AI ecosystem to take stock of, and adapt to, key trends in the AI job market.
In this article, we’ll unpack the current state of the AI job market and review some of the key shifts we’re tracking across the AI workforce. To do this, we’ll leverage data from our partners at Lightcast, who track hundreds of AI-related skills within millions of job postings and professional social profiles every year. This gives us a granular, nuanced view of the critical trends shaping the future of the AI workforce and points to key implications for employers, educators, policymakers, and individuals navigating the AI job market.
So, let’s dive in: what key trends are shaping the AI workforce?
The Supply of AI Workers is Struggling to Keep Pace with Demand, Driving up Hiring Costs
Demand for workers with AI skills remains robust. In 2024, there were 602,544 job openings requesting AI skills – 24% higher than just a year before. During the same timeframe, demand for workers with generative AI skills has grown 313% - faster than nearly any other skill in the market. This underscores the sustained growth in demand for AI workers.
Amidst this growing demand, competition for scarce AI talent is heating up. In the past 12 months, there were 36,125 job openings demanding tech workers with generative AI skills in the United States, but we estimate only 32,450 tech workers with these skills exist in the entire country. This competition is driving up salaries, and tech workers with AI skills now command salary premiums of over $35,000 compared to tech jobs overall.
These growing costs are forcing CIOs, CFOs, and other leaders to make difficult decisions about where to make tradeoffs between investing in AI and other initiatives. In 2024, we estimate that U.S. employers allocated over $78 billion to salaries for employees with AI skills, to say nothing of the money spent on AI tools. In many cases, firms face an uncertain path to capturing ROI from their AI efforts, let alone quantifying it, but eventually they will have to demonstrate the value of their massive AI investments. Amidst strong competition for AI workers, they will also have to take more cost-effective approaches to building their AI workforce, leveraging a mix of hiring, training, and other sourcing strategies.
AI Skills are Rapidly Evolving and Spreading to New Jobs, Creating Headaches for Reskilling
As demand for AI workers and hiring costs have grown, organizations are under increasing pressure to apply AI to concrete, high-value use cases. This is leading firms to shift from AI tinkering to adopting more targeted applications of AI – especially as it relates to finding new ways to leverage generative AI, the most prominent AI tool currently in use. At the same time, firms are moving beyond the move-fast-and-break-things ethos that long dominated AI adoption and are emphasizing responsible and ethical uses of AI.
As a result of these trends, the key skills required in AI jobs are evolving rapidly. From 2023 to 2024, there has been dramatic growth in skills ranging from prompt engineering and generative AI to ethical AI and applied AI, with each of these skills growing well over 200% in just one year. This places these skills firmly among the fastest-growing skills in the entire job market.
Amidst this rapid skill evolution, AI skills are becoming less concentrated in core tech roles. Over the past few years, AI skills have spread to a diverse ecosystem of new fields where they are being applied to tackle domain-specific use cases. In early 2020, the share of jobs requesting AI skills that are outside of core tech roles hovered around 40%. By late 2024, it had jumped to around 55%. This means that most jobs requesting AI skills are no longer in traditional tech roles.
This is creating a new class of jobs that fuse together skills from AI and many other fields, such as marketing, finance, and legal, to name just a few. The problem, however, is that when new skills are fused together from disparate domains there is no existing training infrastructure in place to equip workers with the new mix of skills. This creates headaches for reskilling and exacerbates AI talent shortages.
To combat this, many organizations must take greater ownership of their AI training efforts. In practice, this means they first need to develop a clear understanding of the new skills AI requires them to build in roles across their organization. From there, they need to either build their own training or partner with a mix of training providers who each provide a piece of the broader AI training puzzle. This will help organizations train the right people with the right skills within the context of their organization.
AI Jobs are Spreading Across the Country
The growth in AI, along with the diffusion of AI skills across new domains, is also pushing AI jobs out of traditional tech hubs and into more corners of the country. Since 2019, the share of AI jobs demanded in the largest 15 tech hubs has dropped from 62% to 51%. This is creating more opportunities for workers in different locations, while forcing employers and training providers outside of tech-centric regions to reassess the skills their workers and students need to remain competitive.
Much of this geographic dispersion has been driven by remote job opportunities which, despite high-profile stories of major employers forcing workers back into the office, remain in robust demand. In February 2020, remote opportunities accounted for only 4% of AI job openings, but recently remote job openings have been holding steady around 20% of all AI jobs. Firms in high-cost locations are often turning to remote work for the salary savings: a software developer with AI skills in Raleigh, for example, commands an average salary over $45,000 less than a comparable worker in San Francisco.
While this influx of AI demand can be a boon for communities, it puts more pressure on local employers who now must compete with well-resourced firms in other cities. This can drive up hiring difficulty and cost significantly. As a result, employers in these regions must reevaluate both their compensation levels and their broader talent acquisition and retention strategy. At the same time, training providers in these communities have an opportunity to capitalize on the strong demand by building programs that prepare students for the emerging AI jobs and skills in their region.
The Path Ahead
Taken together, these trends underscore how the main story of AI’s impact on the workforce has, thus far, been one of job creation, not destruction. Employers are demanding new AI jobs and skills, hiring costs are rising, and competition for AI talent is boiling up across the country. This is amplifying pressure on firms to mature how they hire, train, and retain their AI workforce, requiring a creative mix of talent development strategies. It is also forcing educators, policymakers, and individuals to reevaluate what is needed to prepare for the field today and anticipate what will be needed in the future. The pace of change within the AI job market ensures it will remain a dynamic field for years to come – perhaps more so than any other corner of the job market. As a result, both organizations and individuals must keep a consistent pulse on emerging workforce needs if they wish to remain resilient amidst an ever-present backdrop of AI-driven uncertainty.
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