India’s AI talent gap: Only 5,000 core AI engineers in a pool of 20,000, says Xpheno

India's ambition to establish itself as a leading force in artificial intelligence is hindered by a significant shortage of core AI engineers. Recent data from Xpheno reveals that among an estimated 18,000 to 20,000 professionals with some AI knowledge, only about 4,000 to 5,000 are considered true specialists in the field. The remaining individuals are primarily trained to use existing AI tools rather than to create complex models or sophisticated systems from the ground up. Kamal Karanth, co-founder of Xpheno, highlighted the ongoing challenges, stating, "The impact of AI on India’s talent gap is still unfolding; we can only describe it as a work in progress." He noted that the hiring landscape has not yet felt the influence of this gap. At a time when the government is promoting India as a hub for AI talent, industry experts warn that the headline figures obscure a deeper imbalance. While the country excels in AI services and application, it lacks the necessary expertise in core engineering and research roles. Karanth pointed out that AI skill sets are divided into two categories: service-based roles and core AI engineering. He emphasized the need for additional training in core AI positions, which are critical for advancing the technology. To address this, the IndiaAI Mission is pushing universities to shift their focus from basic application-level coding to more complex model-level engineering, aiming to lessen reliance on foreign technology. The government is working with over 500 educational institutions to revise their curricula and is promoting initiatives like the PM Research Fellowship to stimulate doctoral-level research in AI. Meanwhile, the rise of autonomous AI systems is changing the hiring landscape, particularly for entry-level positions. As companies increasingly adopt AI tools from providers like OpenAI and Anthropic, concerns about job displacement within India's IT services sector are growing. Karanth remarked, "The likelihood of AI taking over human roles in routine functions is both high and imminent." He added that as AI technologies evolve, the potential for job replacement will only increase. Currently, the demand for fresh graduates across various sectors falls below 50,000 roles, with technology companies representing only about one-third of that demand. Businesses are exercising greater caution in evaluating their workforce requirements and budgets in an increasingly AI-driven landscape, often limiting opportunities for graduates to short-term or project-based roles. Despite these challenges, certain areas continue to see hiring activity. Xpheno reports a consistent demand for positions in software engineering, data engineering, analytics, full-stack development, machine learning, and solutions architecture. There is also a growing interest in cross-functional roles that merge technical AI skills with business acumen, allowing teams to design effective workflows and deploy models efficiently. Another emerging field is AI advisory, focusing on governance, risk management, and regulatory compliance, which is becoming increasingly significant as organizations transition from pilot projects to full-scale production. Karanth concluded, "While we face a shortage of core AI engineering talent, India’s techno-functional and multi-functional workforce can still serve as a competitive advantage, given the right AI orientation."