Intensifying competition for AI talent emerges in Europe

London, March 11 (Reuters) - The intensifying competition for technical talent in Europe is fueled by a surge in the number of artificial intelligence (AI) startups, prompting companies like Google DeepMind (GOOGL.O) to grapple with the choice of offering substantial salaries or risk losing out on the region's top minds. OpenAI's ChatGPT's remarkable success has sparked enthusiasm among investors, leading to significant investments in promising AI startups as they seek the next breakthrough success.

Benefiting from this investment influx, several foreign AI firms, including Cohere from Canada and Anthropic and OpenAI from the United States, established European offices last year. This further exacerbates the challenge for tech companies already competing to attract and retain talent in the region. Founded in 2010 and acquired by Google in 2014, DeepMind gained recognition for applying AI to various fields, from board games to structural biology.

However, the company now faces stiff competition from well-funded rivals encroaching on its territory, and a growing number of its employees have departed to launch their own ventures. Notable departures include co-founder Mustafa Suleyman, who founded Inflection AI in California alongside LinkedIn billionaire Reid Hoffman, and research scientist Arthur Mensch, now the CEO of Mistral AI. Both companies have rapidly achieved multi-billion dollar valuations. To discourage staff from joining other companies or starting their own, DeepMind reportedly granted a select group of senior researchers access to restricted stock worth millions of dollars earlier this year, according to an insider.

Acknowledging the competitive landscape, a DeepMind spokesperson informed Reuters that the company "continues to do well in attracting and nurturing talent."

Narrowing the Divide

Avery Fairbank, an executive search firm, reports a significant surge in compensation for C-suite personnel in British AI companies over the past year. According to Charlie Fairbank, the managing director of the firm, the competitive landscape is set to intensify with the entry of foreign AI giants like Anthropic and Cohere into the London market. Executives with base salaries around £350,000 have experienced a substantial increase in pay ranging from £50,000 to £100,000.

Cohere, specializing in in-house chatbots and tools, appointed Phil Blunsom, a former lead researcher at DeepMind for seven years, as its chief scientist in 2022. Sebastian Ruder also joined Cohere from DeepMind in January. Ruder expressed the rarity of finding a company building a significant business from the ground up with leading industry experts, emphasizing the importance of seizing such opportunities. However, he refrained from commenting on his salary.

Ekaterina Almasque, a general partner at venture capital firm OpenOcean, noted that DeepMind is no longer the undisputed leader in the field, as competition for AI talent has intensified. With an AI skills shortage, the talent pool has become more limited. Mustafa Suleyman, co-founder of DeepMind, is actively recruiting technical staff for Inflection AI in London. Meanwhile, Arthur Mensch's Mistral has quickly gained attention as one of the most talked-about startups in Europe, securing $415 million in venture funding in December. Mistral chose not to comment, and Inflection did not respond to inquiries.

Increased Impact

OpenAI inaugurated its initial international office in London last year, swiftly followed by a second office in Dublin. According to Diane Yoon, the company's Vice President of People, these developments mark just the initial phases of expansion, with plans to further extend into additional countries. Cohere, having established its UK office last year, is actively growing its presence, aiming to double its workforce in London to 50. CEO Aidan Gomez, splitting his time between Toronto and London, emphasized the company's strategy of pursuing talent, which is abundant in London and across Europe.

In the current competitive landscape for talent, prospective employees are gaining leverage in negotiating with employers. ElevenLabs, an AI audio firm based in London, is enticing new hires with stock options, attractive salaries, and the flexibility of fully remote work. Despite the preference for European-based employees, the company, having recently secured $80 million in funding from venture capital firms like a16z and Sequoia, intends to double its overall staff to 100.

Bioptimus, a startup based in Paris and founded by former DeepMind staff, raised $35 million in February. Thomas Clozel, an early investor in the company, highlighted the trend of startups seeking to attract talent from major tech companies like Google by offering increased influence over the direction of the company. He emphasized the unique opportunity for individuals in smaller startups to stay true to their passion and have a stake in the company's success.