AI talent war pushes US firms to Asia’s outsourced coders

Hiring AI engineer is proving to be tricky for US executives of firms outside of Big Tech. Many are promising flexible setups and purposeful work, while others are leaning into a tried and tested strategy: outsourcing.

With tech salaries climbing and AI specialists scarce, more US enterprises are looking to outsource teams from Southeast Asia and India for their tech development needs. According to a Deloitte survey, over 70% of US organizations are outsourcing their software development and innovative tech needs, which include AI.

Specialized software developers and computer programmers in these Asian markets that have long served US enterprises are transitioning to become AI-focused tech teams for hire. Some are also developing their own suite of AI enterprise software.

Photo credit: Proudcloud

Take for instance First Mate Technologies, a Philippines-based firm that has served more than 30 startups in the US. It has helped clients build the first version of a product or launch a new feature.

“We come in, we build a product, and with our work, the startup can attract a CTO,” says First Mate CEO Hiro Yamada. “That formula has happened more than once, and it helped our clients raise funding.”

Yamada adds that his company’s client base has doubled over the past year.

First Mate isn’t the only one serving US enterprises’ AI needs. From Mumbai to Manila, firms have emerged to aid in a wide range of projects, from simple product development to becoming de facto in-house engineering teams.

Asia’s cost-effective promise

Like the business process outsourcing industry, contracting tech teams for hire in Asia has emerged due to their cost efficiency.

These firms offer 50% to 70% cheaper talent costs compared to hiring full AI engineering teams in the US, according to software development firms in the Philippines and Vietnam interviewed by Tech in Asia.

Data from Ziprecruiter shows entry-level AI engineers in the US take home an average of US$69,000 a year.

In Vietnam, the same role pays between US$17,800 to US$28,600 a year. In the Philippines, it is even cheaper at an average of US$14,000 a year, data from Indeed shows.

See also: Call center apocalypse fails as flesh beats AI economics

ProudCloud, a Manila-based software development boutique firm, assigns a team of six full-stack developers to serve one client. Each team has a product owner, a project manager, and four engineers.

Flexible work setups

More than cost savings

Trust is critical