Artificial Intelligence: U.S. Talent Spotlight

U.S. companies across many sectors are increasingly using artificial Intelligence (AI). The highly trained individuals who create and implement AI are among the most sought-after by employers. The hiring demand for this specialized talent pool far outpaces supply, creating challenges for companies that need these skills for critical business objectives. CBRE Americas Consulting helps clients formulate hiring strategies to leverage both established and emerging talent markets to acquire and retain quality AI talent.

Record venture funding for AI-driven companies has fueled this rapid AI talent demand growth. 2021 saw an all-time high for AI venture funding with $62 billion deployed globally, according to Crunchbase. This is a 119% increase from 2020’s total funding amount and a 300% increase from 2016. Total deal volume decreased to $35.2 billion in 2022 but was still 47% above the 10-year rolling annual average. 2023 is on pace to match 2021’s record funding level. Historically high funding and the resulting talent demand growth are projected to continue for the foreseeable future. Amid this highly competitive hiring landscape, where U.S. AI talent is located, how to access it, and how the landscape is shifting are critical considerations.

What's AI?

AI is the simulation of human intelligence in computer systems, by performing tasks normally requiring human thinking. With the ability to absorb extremely large datasets, AI enables speech recognition, visual perception, learning, planning, problem solving and much more.

Industry Concentration: Which industries employ the most AI talent and have the fastest-growing demand?

Figure 1: Which sectors employ the greatest share of U.S. AI talent?

Source: CBRE Americas Consulting; LinkedIn Talent Insights, Q2 2023.

Figure 2: Which sectors have the fastest growing demand for AI Talent?

Source: CBRE Americas Consulting; LinkedIn Talent Insights, Q2 2023.

Unsurprisingly, the largest portion of U.S. AI talent is in the software and technology industry (39%). The second-highest concentration is in higher education (14%). Financial services, marketing & advertising, and healthcare round out the top five industries employing AI talent. The software and technology industry dominates this field, with more talent than the other four industries combined. Recent hiring patterns show numerous industries are increasingly seeking AI talent. The five industries with the highest one-year AI talent growth rate – each over 35% – are non-profits, law firms, online media, retail and renewable energy.

Geographic Concentration: Where are established and emerging AI talent markets?

Figure 3: Artificial Intelligence Supply

Source: CBRE Americas Consulting; LinkedIn Talent Insights, Q2 2023.

AI talent is highly concentrated in top U.S. markets. One-third of all talent is in the top three primary markets and about two-thirds are in the 10 largest markets. The San Francisco Bay Area, the top market by far, has over 630% more talent than the secondary market average. AI talent volume is increasing in nearly all U.S. markets but more established metros like the San Francisco Bay Area and Seattle have slower growth rates. New York City is an example of a primary market with a relatively higher growth rates. Texas and Florida contain metros with top AI talent growth rates, but talent volume remains comparatively small. Tertiary Midwest regions such as Kansas City, Indianapolis and Cleveland have emerging, rapidly growing talent pools. They can offer more cost-efficient, less competitive hiring.

The presence of a large research university with an established AI education program tends to be a strong indicator of an emerging AI talent hub. A few large employers hiring AI talent can also fuel a talent hub’s growth. Several Upstate New York and Midwest markets fit this profile. The semiconductor industry’s growth has contributed to the emergence of talent hubs in places like Albany, Rochester and Columbus. These employers are ramping up AI talent hiring.

Figure 4: Greatest AI Talent In-Migration Ratios

Source: CBRE Americas Consulting; LinkedIn Talent Insights, Q2 2023.

Talent Demand vs. Supply: Which markets have lower AI talent acquisition and retention risk?

Figure 5: Artificial Intelligence Hiring Risk Ratio

Source: CBRE Americas Consulting; LinkedIn Talent Insights, Q2 2023.

The ratio of talent supply to demand (as measured by unique AI talent job postings) is one measure of the hiring risk in a talent market. The San Francisco Bay Area has the largest AI talent pool but also high demand, giving it above average talent acquisition and retention risk. Several smaller but higher-growth tech markets such as Austin and Nashville are now also riskier, as demand has far outpaced supply. Larger markets like New York City, Seattle and Los Angeles have relatively lower demand and are better positioned for the scalable hiring of AI talent. Two high-growth emerging markets, Orlando and Indianapolis, offer smaller AI talent pools but a comparatively better hiring risk profile.

Gender Parity: Which markets have the most and least AI talent gender parity?

Many companies want to hire more female tech talent, this is especially true in AI roles, where women are underrepresented. While no markets have total gender parity, the largest and most established AI talent markets such as the Bay Area, New York City and Los Angeles have among the smallest AI gender gaps. Columbus has the smallest overall gender gap. This is perhaps driven by the talent composition of a small number of large local employers. Salt Lake City has the largest gender gap among medium to large U.S. markets, followed by Orlando, Minneapolis, Jacksonville and Las Vegas. Hiring female AI talent in these markets may pose greater challenges.

The Big Picture

Despite recent workforce reduction in the technology industry, AI will remain heavily in-demand as more companies seek to benefit from this technology. The severe imbalance between AI talent supply and demand will likely continue. Organizations hiring AI talent at scale should consider an informed location strategy that fully considers the supply and demand drivers in each market. This planning is necessary to achieve ongoing talent acquisition and retention in today’s employee-favorable market.