The AI talent wars aren’t slowing down anytime soon

This isn’t the first time the tech world has seen a talent boom. Remember the Internet boom in the late 1990s? Or the mobile revolution in the early 2000s? Or the cloud computing surge that followed? Each of these waves created fierce competition for specialized talent, driving pay premiums and aggressive hiring strategies. However, the current AI boom is on a whole new level — bigger, faster, and more intense.

Companies are racing to build smarter AI models and superintelligence capabilities, and the demand for AI talent is exploding. A recent report by the World Economic Forum reported that AI has already added 1.3M jobs and there just isn’t enough skilled people to fill those roles.

This shortage is pushing salaries and compensation packages to new heights, higher than we’ve ever seen before. In fact, Mercer’s AI & Emerging Technology Survey shows that some of these AI roles are commanding 30% pay premiums or more. So, who are the people filling these roles and what do you need to know about recruiting top AI talent?

Who are we talking about?

Pay premiums are highest at the top

If you’re looking at AI job pay, the biggest differences show up at senior and leadership levels. Proven AI leaders — those with a track record of success — command the highest pay premiums. They’re often paid up to 30% more than software engineers at the same level. This premium reflects how critical these leaders are in shaping an organization’s AI strategy and building out teams.

At lower levels, the pay picture is more mixed. AI specialists and software engineers often have overlapping responsibilities, making it harder to justify big pay gaps. So, while you might see some premium for AI skills, it’s not as dramatic as at the senior levels.

Mergers and acquisitions are a key talent strategy

To build AI teams quickly, many companies are turning to mergers and acquisitions (M&A). This “blitzhiring” approach means acquiring startups mainly for their talent. Mercer’s M&A 2025 Retention Insights Report shows that high-tech companies are offering retention bonuses and equity packages that are on average twice as high as those in non-tech industries. These incentives help keep the acquired teams motivated and reduce turnover.

What you should know

Measuring the value of AI talent is still a challenge

Even with all this investment, many leaders aren’t sure how to measure the long-term economic impact of AI talent. A survey of global tech industry total rewards leaders revealed 91% of tech industry total rewards leaders are uncertain about how to link AI hiring to business value. Because of this uncertainty, companies are compressing incentive timeframes to just two or three years, while keeping overall rewards high. This approach balances rewarding talent generously with the need to stay flexible in a fast-changing market.

Infrastructure matters as much as pay

Here’s something you might not expect: companies are investing heavily in AI infrastructure as part of their talent strategy. For some tech giants, having innovative data centers and next-generation compute capacity is just as important as offering competitive pay. Working with the latest and most powerful technology is a big draw for AI professionals.

Why are we talking about this?

Pay is different this time

What makes pay for AI jobs stand out? For one, companies are investing billions in AI infrastructure and talent acquisition. In 2025 alone, global spending on AI infrastructure is expected to hit $375 billion. That’s a massive jump compared to previous tech investments like cloud computing.

Because AI development requires cutting-edge hardware and massive computational resources, companies aren’t just competing on salary. They’re also offering unique perks like access to the latest AI models, autonomy in research, and the chance to work on foundational AI projects that could change the world.

The future of AI pay

As long as demand outpaces supply, salaries will keep climbing, especially for those with the skills and vision to lead AI initiatives. But companies are learning that pay alone isn’t enough to win the war for talent.

How to compete in recruiting AI talent

If you’re involved in hiring or managing AI talent, here are some clear recommendations based on the latest research:

• Invest in both talent and infrastructure at the same time. Access to the latest, biggest, or most unique technologies is as much a differentiator as pay.
• Be ready to offer significant pay premiums for proven AI leaders and senior professionals, especially when you’re building new teams.
• Understand that pay differences at lower levels may be less pronounced because roles often blend together.
• Use strategic mergers, acquisitions, and partnerships to accelerate talent acquisition and build capabilities quickly.
• Adapt your incentive structures to reflect the fast pace of AI development. This might mean compressing timeframes but keeping total rewards competitive.
• Work with high-profile recruiters and form partnerships with academia to secure the best talent.

It’s about more than just paying more

The AI talent market is a high-stakes, high-investment arena. It’s reminiscent of past tech booms but stands apart because of the scale, complexity, and impact of AI. Companies that master the art of combining competitive compensation, strategic acquisitions, and cutting-edge infrastructure or partnerships will lead the next wave of innovation.

If you want to stay ahead in this rapidly evolving market, it’s not just about paying more. It’s about creating the right environment where AI talent can grow, innovate, and drive your business forward.

Partner with Mercer’s team of experts to develop a rewards strategy that gets you the AI talent you need today and the knowledge to move forward with the future of AI. Contact Mercer at 866-605-1031 or at surveys@mercer.com.

About the author

Crystyl Swanson, Principal

Crystyl has over 20 years of experience serving clients across a wide range of industries and leadership roles. Serving Mercer as the Commercial Strategist for the Technology Industry, she brings a new perspective and a wealth of knowledge and experience in the ever-evolving talent landscape.