Europe’s AI startups are being forced to ramp up creative recruiting tactics as they sweat over a talent shortage among AI workers and try to outcompete each other for the best hires.
Some of the continent’s buzziest AI startups tell Sifted there are more roles being created at tech companies in Europe than there are people to fill them — and that competition is getting fiercer.
At the core of the increased demand for AI talent is record investor money flowing into the sector and US players such as OpenAI and Anthropic hiring on European shores. The emergence of AI agents as the new hype sector in VC is also pushing more companies into the race to recruit AI-specialised software engineers.
An outflux of European AI talent to the US is narrowing the pool further.
“Many well capitalised AI companies in the US are hiring talented PhDs and technical engineers from European countries, who then later relocate to the US,” says Denny Gabriel, San Francisco-based investor at Runa Capital. In September last year, AI sales agent startup 11x moved across the Atlantic after raising a $24m Series A — in part due to better access to top AI talent.
Now execs at AI darlings, including ElevenLabs, Synthesia and Nscale, say they’re stepping efforts to get closer to star researchers from Europe’s top institutions, upskilling engineers internally and even looking to lean on AI agents to pick up some of the slack as the nascent tech develops.
“AI talent has never been in higher demand, and US Big Tech expanding into Europe has only intensified competition,” says Dan Bathurst, chief product officer at AI data centre startup Nscale.
Cosying up to the best researchers
Startups in Europe on the hunt for the best AI talent have little choice but to pursue hires from academia. But there are two immediate snags.
One is that many of the best AI researchers are keen to build their own startup, as opposed to working for another, says Artem Sokolov, founder of UK-based AI robotics startup Humanoid. “It’s not just that the hiring process itself is difficult,” he tells Sifted. “It’s that these specialists often have equally strong opportunities to attract their own investments.”
The other is that the pool to pick from is slim to start with. “When it comes to AI, the shift is so new that there are very few ‘experts’ that already exist,” says Shannon Harrington, head of talent at Balderton. “Those that are experts will likely come from academia, where they have been focused on research.”
Synthesia, which is building AI avatars for enterprises, tells Sifted its upping its presence at major research conferences in Europe to tap into hot academic talent before competitors.
The startup delivered a keynote presentation and paid to host a reception at the European Computer Vision Association in Milan last year. It’s also recently begun to sponsor PhD students at the Technical University of Munich doing research on AI avatars.
“We have good ties with multiple universities — including University College London and TU Munich, where two of our cofounders were educated — and are currently investigating how we can strengthen those even more,” says Alexandru Voica, head of policy at Synthesia.
AI voice generation startup ElevenLabs says it’s investing heavily in developing a presence in emerging tech ecosystems to access talent pools.
Late last year it announced plans to invest $11m in Poland over the next five years, including opening a Warsaw office and deepening ties with local institutions. ElevenLabs sponsored a coding competition at the University of Warsaw in 2024 and organises regular hackathons across the globe to engage with promising AI talent.
Upskilling
But while academia can provide a steady stream of talented AI software engineers, it isn’t set up to feed grads into the pool needed to build next generation AI infrastructure, says Bathurst.
“Most computer science graduates aren’t even aware of careers in AI infrastructure because university courses focus almost entirely on software development,” he tells Sifted.
“This can leave startups competing for a very small pool of engineers who understand how to design, optimise and scale AI workloads efficiently.”
“Lots of people are learning AI at universities, but you have to build a lot to actually get it,” adds Alberto Rizzoli, founder and CEO at AI system training platform V7. “Until you’ve built LLMs systems and failed and failed and failed, you don’t know what great looks like.”
Nscale has launched a dedicated mentorship programme that pairs new hires transitioning from software to AI infrastructure roles with experienced senior engineers.
“By immersing them in real production environments, we help them hone vital skills quickly and gain practical experience in distributed AI systems,” says Bathurst.
AI software agent startup Tessl — which raised $125m across two rounds in 2024 — is also planning to run a weeks-long “bootcamp” to retrain non-AI specific developers in the tech, Sifted understands.
AI agents
Recent technological developments with AI agents could also help relieve the talent shortage by allowing senior developers to achieve more with fewer resources, says Rizzoli. “Agents will enable companies of 10 to do what companies of 100 used to do.”
This is particularly the case in the early-stages of product design, as developers can now build prototypes in two to three hours using agentic tools like US coding software Cursor, Rizzoli adds — something that he says previously took two days.
But AI agents aren’t yet a silver bullet for the AI talent shortage in Europe, he warns — with the capabilities of the tech still in its early stages.
That means the talent shortage for AI engineers will get worse before it gets better, Rizzoli tells Sifted.
“This is very similar to the mobile revolution — around the time of the release of the App Store in 2008, there was a massive shortage of mobile developers,” he says.
“We’re at the peak of demand for AI talent, and the peak will continue for another year.”
Read the orginal article: https://sifted.eu/articles/ai-talent-crisis/
