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The numbers are stark. AI and ML job postings surged by over 160% in 2025 according to industry data. The average AI engineer now commands $206,000 a year. And for every qualified AI engineer available, there are 3.2 open roles waiting to be filled.
This isn’t a hiring problem. It’s a structural crisis – and it’s getting worse.
The market that broke overnight
Three years ago, AI and ML roles represented roughly 10% of all tech job postings in the US. By early 2025, that share had grown dramatically – some estimates place it as high as 50% of all tech postings. New titles that barely existed in 2022 – Generative AI Engineer, AI Agents Developer, Chief AI Officer – now dominate hiring pipelines.
According to IBM’s recent Global AI Adoption Index, one in four companies already has a Chief AI Officer. 66% expect most organizations to have one within two years.
The demand is real. The supply isn’t keeping up.
Five reasons the talent pool isn’t growing fast enough
1. The specialization gap is widening.
Over 75% of AI job listings now seek domain experts with deep, specific knowledge – not generalists. Companies aren’t looking for someone who “knows Python.” They need engineers with hands-on experience in LLM fine-tuning, MLOps, or multi-modal AI systems. Universities are ramping up AI programmes, but production-ready specialists take years to develop, not semesters.
2. AI broke its own entry-level pipeline.
Here’s the paradox no one talks about enough: AI tools now perform much of the simpler work that traditionally trained junior engineers. Entry-level tech postings have dropped significantly – some industry data points to declines exceeding 50% in certain segments. There is no quick domestic fix – the bottom rung of the career ladder is broken, which means the experienced engineers companies need aren’t being grown fast enough.
3. Top talent is off the market fast.
The average software engineering role takes 52 days to fill. For specialised AI positions, it’s often longer – while the candidates themselves move quickly. Engineers with strong GenAI credentials receive multiple competing offers simultaneously. Firms that fail to move fast lose talent before the second interview.
4. Salaries have entered a different stratosphere.
Average AI engineer compensation reached $206,000 in 2025 – a $50,000 jump in a single year. In San Francisco, Lead and Principal AI roles now command up to $355,000 base. For mid-market companies competing against Big Tech for the same candidates, this is a war they cannot win on salary alone.
5. Skills evolve faster than hiring does.
Nearly 39% of workers’ core skills will be transformed or outdated by 2030. In-demand specializations today – AI Agents, edge AI deployment, multi-modal systems – barely existed two years ago. Traditional hiring processes built around degrees and credentials simply cannot keep pace. A quarter of employers have already dropped degree requirements; 70% now prioritize demonstrated skills over formal education.
Why nearshore is becoming the strategic answer
Faced with a domestic talent crunch that shows no signs of easing, forward-thinking US companies are expanding their search to Europe – specifically to engineering hubs in Poland and Portugal. The case isn’t just about cost, though the numbers are compelling: senior AI engineers in Poland command €50,000–€100,000, delivering savings of up to 50% compared to US equivalents at comparable seniority. Time-to-hire drops from 44–60 days to approximately 20. But cost is table stakes. What makes Poland and Portugal genuinely competitive is depth.
Polish developers consistently rank among the top performers in global coding competitions. The country has built one of Europe’s largest pools of AI-skilled professionals, with particular strength in MLOps, data platforms, and GenAI application development. Portugal has established a growing AI research output and is recognised for exceptional English fluency and long-term talent retention – critical for complex, multi-year AI projects where continuity matters.
Both markets offer 5-6 hours of daily overlap with US East Coast working hours. Real-time collaboration on standups, architecture reviews, and problem-solving isn’t a compromise – it’s a standard.
What this means for your hiring strategy
The US AI talent shortage isn’t a temporary spike. It’s a structural shift driven by the speed of AI adoption outpacing the speed of talent development. Companies waiting for the domestic market to correct are already behind.
The organizations gaining ground are those that expanded their definition of “where great engineers come from” and built the processes to work with them effectively. That’s where nearshore partnerships stop being a cost-saving tactic and start being a competitive advantage.
ITDS connects US-based companies with senior AI and engineering talent from Poland and Portugal. From individual specialists to full AI teams – built in as fast as 20 days.
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