The AI goldrush: Silicon Valley is dishing out million-dollar salaries to engineers who are literate in new tech - with average wages $100,000 higher than non-AI engineer jobs

Tech companies are willing to pay top dollar - up to $1 million or more - to poach talented software engineers with experience in generative artificial intelligence.

Employees who know how to work with large language models and semiconductor chips - which is the technology undergirding popular apps like ChatGPT - are becoming a rarity in the job market, according to executives. 

These lucrative offers from AI startups, which include attractive stock-vesting schedules, are coming as big tech companies like Google, Meta and Amazon continue on with gargantuan layoffs despite increasing profits.

Databricks, an AI and data storage firm, told the Wall Street Journal that finding run-of-the-mill engineers isn't a challenge - but finding ones with enhanced AI skills is. 

The median annual pay for AI engineers is around $280,000, while non-AI engineers can expect a salary closer to $190,000 according to data from career-services platform Levels.fyi.

Naveen Rao, VP of generative AI at Databricks, says there might be only a couple hundred people qualified to take on challenges that come with AI engineering

Arthur Mensch, cofounder and CEO of Mistral AI attends the AI Safety Summit in Bletchley Park, near Milton Keynes, Britain, November 2, 2023

Naveen Rao, the vice president of Generative AI at Databricks, said the real challenge is picking potential staff from an estimated talent pool of 'a couple of hundred' that have actually trained large language models themselves, and can reliably troubleshoot problems as they come up. 

He told the WSJ: 'There is a secular shift in what talents we’re going after.

'We have a glut of people on one side and a shortage on the other.' 

Databricks is right in line with AI salary estimates, as even just an entry level software engineer hired there can expect to earn $224,000 total, including base pay, stock options and bonuses, Levels.fyi data reveals. 

For a senior staff engineer, Databricks offers around $964,000 total compensation. 

Rao said that for specialized AI new hires, compensation packages can reach an eye-watering $1 million or more. 

Levels.fyi co-founder Zuhayeer Musa also told the Wall Street Journal that OpenAI's compensation packages are more than double compared to similar jobs at Meta. 

Six candidates for positions at OpenAI told Levels.fyi that the median salary was $925,000 a year including bonuses and equity in the company. The total median pay for 344 machine learning and AI engineers at Meta was $400,000.

The Journal also noted that companies across different sectors are giving spur-of-the-moment salary increases to prevent talented AI professionals from fleeing to startups.

Scott Chetham, CEO of AI-powered Faro Health, explained that he offered a candidate employed at a large consulting firm a job. The candidate's firm responded by doubling her salary in a bit to retain her - and her coveted AI talents. 

The beginnings of the modern AI boom started as early as 2015 when OpenAI was founded by CEO Sam Altman and Elon Musk. When the company came out with ChatGPT in November 2022, it quickly became a household name, reaching 100 million active users in January 2023.

This rapid growth, while great for these companies, necessitates talented workers who know what they're doing. Some employees that have been stationed at major tech companies know that and are foregoing their larger base salaries in hopes that a gamble on AI now will pay off big time in the coming years.

OpenAI CEO Sam Altman (left) attends a session of the World Economic Forum (WEF) meeting in Davos on January 18, 2024. Justin Kinsey (right) is the president of SBT

Justin Kinsey, the president of semiconductor firm SBT, told the Wall Street Journal he recently recruited a candidate from Microsoft. 

In the process, this person reportedly turned down more than $1 million in bonuses and Microsoft stock, while also agreeing to a $100,000 cut in his base salary to join up with Kinsey's startup.

He made the move because he believes that he'll make $40 million from just SBT's stock in five to seven years. 

Another avenue for tech employees to strike it big in the AI world is by going out on their own - as former Google employee Arthur Mensch has done. 

Mensch founded Mistral AI in April 2023 and less than a year later, the company has been valued at $2 billion. 

However, poaching is coming in both directions. AI startups are trying to pull engineers from big tech, but big tech is also trying to bring small, successful AI teams into the fold.

For example, Apple acquired Darwin AI in mid-March. The iPhone maker hired a number of Darwin's employees to join the its own AI division to possibly help with the implementation of generative AI in upcoming iOS 18, Bloomberg reported.