A Multiple Linear Regression Approach to Predicting AI Professionals’ Salaries from Location and Skill Data

Abstract

The rapid growth of Artificial Intelligence (AI) industries worldwide has increased the demand for skilled professionals and highlighted the need to understand salary determinants in this sector. This study aims to analyze the factors influencing the compensation of AI professionals globally, with a particular focus on the effects of company location, experience level, and required technical skills. Using a dataset of 15,000 AI job postings collected from multiple countries, a Multiple Linear Regression (MLR) model was developed to identify predictive relationships between independent variables—location, experience, and skills—and the dependent variable, annual salary in U.S. dollars. Data preprocessing included one-hot encoding for categorical variables, standardization of numerical attributes, and vectorization of text-based skill descriptions. Model evaluation produced strong predictive results, with an R² of 0.82, a Mean Absolute Error (MAE) of 18,677 USD, and a Root Mean Squared Error (RMSE) of 25,704 USD. Statistical tests confirmed that company location and experience level significantly affected salary outcomes (p < 0.05), while technical skills contributed only marginally. These findings suggest that structural factors such as geography and seniority play a more decisive role in determining AI salaries than specific technical competencies. The study concludes that MLR offers a transparent and interpretable analytical framework for exploring salary disparities in the global AI workforce. The results provide practical implications for organizations designing fair compensation policies, professionals assessing market value, and educators aligning training programs with evolving industry demands.