US AI startups pay engineers 4 times more than European ones, and the reason has nothing to do with talent

Anthropic's median engineer salary now sits at $746,000, with its best offers stretching past $1.25 million. Compare that to Lovable, the Stockholm-based AI coding startup, where the same role tops out around $176,000. Do the math and Anthropic could hire four Lovable engineers for the price of one of its own. That gap isn't a rounding error. It's the clearest number yet showing how differently the US and European AI markets value the same skill set.

The obvious explanation — American engineers are simply better — doesn't hold up. Lovable ships a genuinely competitive AI coding product, and Stockholm has produced plenty of strong technical talent over the years. What's different is capital. Anthropic has raised tens of billions of dollars and can burn cash on payroll the way a startup burns cash on cloud credits. European AI companies, even the well-funded ones, are still operating with valuations and funding rounds a fraction of their Silicon Valley counterparts. Money in, money out. Simple as that.

There's also a structural piece here that goes beyond one company's balance sheet. US venture funding for AI dwarfs European venture funding, and that imbalance compounds. Bigger rounds mean bigger equity packages, bigger cash offers, and bigger war chests to poach talent from smaller shops. Meanwhile European founders often talk about needing to be capital-efficient almost as a badge of honor, which sounds admirable until you realize it's partly forced upon them by a shallower investor pool.

And the effect isn't contained to salaries alone. When top engineers see a 4x pay difference for functionally the same job, some of them move, or at least keep one eye on a US offer. That slow drain of talent toward better-funded companies has been a quiet undercurrent in the European tech scene for years, and pay gaps like this one make it a lot less quiet.