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Demand far exceeds the number of qualified candidates, forcing companies to look overseas, Jason Yang, CEO of Shenzhen-based recruitment firm Touch HR told Singapore newspaper The Straits Times. His company hires AI professionals from the U.S., Europe, and Singapore, many of them ethnic Chinese who studied at top Chinese universities before pursuing advanced degrees abroad, he said.
The shortage has intensified competition among major firms, including Xiaomi and Alibaba, leading to aggressive recruitment tactics such as poaching from rivals and offering lucrative salaries. Some companies are expanding their search globally despite the higher wage expectations.
The hiring surge follows DeepSeek’s rapid ascent in the AI sector. In January the company stunned the tech industry with its open-source reasoning model, causing a sell-off in U.S. tech stocks. AI job applications in China jumped by 69.6% in the first week of February, according to Chinese hiring platform Zhilian Zhaopin. Related industries like computer hardware also saw increased hiring activity, but also suffer from a significant talent gap.
A 2023 McKinsey report estimated that China will need six million AI professionals by 2030 but supply will be only a third of that number. An August 2024 study by Renmin University highlighted a severe shortage of top-tier AI scientists and experts with interdisciplinary skills.
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Two men working on coding together. Illustration by Pexels |
The rise of large language models has driven more businesses to adopt AI, but many are still in their infancy in implementation, Zhang Chenggang, an associate professor at Capital University of Economics and Business, said. He said foreign hires could provide short-term relief.
AI has emerged as a bright spot in China’s job market, where youth unemployment remains high despite four consecutive months of decline as of December 2024. At a job fair in Shenzhen on Feb. 18, employers reported heightened interest in AI positions amid the DeepSeek-driven hiring boom.
Yang said demand has surged since OpenAI released ChatGPT in late 2022. While universities are ramping up AI education, Yang noted that advanced research roles typically require PhDs.
In 2020 China’s Ministry of Human Resources and Social Security reported a shortage of over five million AI professionals, and said talent development was an “urgent priority.” It warned that if training programs do not scale up, the gap could exceed 10 million by 2025.
Since Beijing launched its AI leadership strategy in 2017, more than 500 universities have started offering AI. Leading institutions like Tsinghua and Renmin universities have established AI schools to expand the talent pipeline.
Competition has driven up salaries. PhD graduates can earn up to one million yuan (US$137,741) annually, Yang said, while top talent commands 10-20 million yuan. DeepSeek has been recruiting aggressively. With its 14-month pay structure, annual compensation for deep learning researchers can reach 1.54 million yuan, according to a Feb. 4 Chinese media report. The company has 150 employees and is looking to hire 52 more. The average annual salary for an AI engineer in China is around 380,000 yuan, according to U.S. job platform Glassdoor.
The financial viability of AI is driving job growth, but in a competitive market, this could eventually lower prices and impact profitability, Kailing Shen, an associate professor of economics at Australian National University, said.
Zeng Xiangquan, director of the China Institute for Employment Research at Renmin University, said China’s AI talent gap could narrow within five to 10 years as universities expand AI-focused programs. The bigger challenge is securing enough computing power and training data—key drivers of AI progress—especially under U.S. chip restrictions, he added.