AI startups hiring sees two-fold increase; absorbing talent from Google, Meta, Amazon: Report – The Economic Times

Artificial intelligence (AI) startups are hiring at twice the rate of Big Tech, drawing top talent away from giants like Google, Meta, and Amazon, according to Microsoft‘s 2025 Work Trend Index.Companies known as “Frontier Firms” — built around AI-driven intelligence and human-agent teams — are already thriving, with percent of their employees reporting success, compared to 37 percent globally. However, a growing “Capacity Gap” threatens many organisations, as 80 percent of workers lack the time and energy to meet demands.

To bridge this, 82 percent of leaders plan to deploy AI agents and automation within the next 12 to 18 months, fundamentally reshaping operations and workflows.

ET had reported on this trend recently, where companies like Zerodha and other startups are increasingly relying on AI agents to build critical parts of their platforms.

Founders told us that AI tools like ChatGPT, Gemini, and Claude are now writing 40–80 percent of production-level code, delivering precise, error-free results that drastically boost efficiency.

The global workforce is undergoing a seismic transformation. Driven by the rise of digital labour and AI-human collaboration, businesses are rethinking core strategies to stay competitive.

Economists liken this moment to the industrial revolution, suggesting AI-augmented workplaces will unlock new economic value and redefine competition.With major AI firms like OpenAI and Anthropic securing billions in investment and legacy companies like IBM overhauling workflows to integrate AI, Microsoft’s message is clear: companies that embrace AI-driven transformation will lead the future — and those that don’t risk being left behind.

In this new AI-driven era, every employee will need to think like an “agent boss”, someone who manages and collaborates with AI agents to drive productivity, the report says.

As agents become an integral part of the workforce, 41 percent of leaders expect their teams to train agents, and 36 percent predict they will be managing agents within the next five years. In fact, 79 percent of leaders believe AI will accelerate their careers, compared to 67 percent of employees who believe so.

However, this shift won’t stop at the executive level. As AI becomes embedded in every function, leaders are beginning to rethink their workforce composition. While 33 percent are considering reducing headcount, 78 percent are planning to hire for new AI-specific roles. As organisations evolve, AI is expected to empower employees to take on more strategic and complex tasks earlier in their careers, creating new opportunities across all levels of the workforce.

Globally, tech leaders like OpenAI’s Sam Altman, Salesforce CEO Marc Benioff, and Anthropic’s Dario Amodei have predicted a future where AI generates most of the world’s software.

In March, Y Combinator’s CEO revealed that about 25 percent of its startups are already using AI to write 95 percent or more of their code — underscoring just how rapidly digital labour is becoming central to innovation.

Meanwhile, the Indian conversational AI market is booming — valued at $516.8 million in 2024 and projected to soar past $4.9 billion by 2033, according to IMARC Group — signalling strong and rising demand for AI-driven solutions. The areas where some of the use cases are taking off include ecommerce, contact centres, and banking and financial services.

The latest edition of the Microsoft report draws on labour and hiring insights from a survey of 31,000 people across 31 countries, combined with trillions of anonymous, aggregated signals from emails, meetings, and chats on Microsoft 365.