Cover letters used to go straight to a person, or nowhere at all. Now, at most large employers, they pass through software first, and understanding what that software is actually doing changes how you should write one.
Two layers, not one
Around 83% of companies now use some form of AI to screen job applications, and most of that runs on two layers stacked together. The first is a classic applicant tracking system parser, scanning for keywords, phrases, job titles, and specific qualifications against the posting. The second, increasingly common layer, is a newer AI model that summarizes and ranks whatever survives that first pass. Your cover letter typically gets read by both, the parser checking for the presence of relevant terms, and the ranking layer weighing how closely your overall letter matches what the role is asking for.
What the AI layer is actually doing
The AI layer isn't reading your letter for tone or personality the way a person might. It's scoring how closely your language maps to the specific requirements in the job posting, then stack-ranking you against every other applicant so a recruiter's attention goes to the closest matches first. It's important to know the AI doesn't make the final hiring call, a person still does, the AI just decides who that person looks at first. It's also worth knowing these tools generally aren't built to detect AI-generated writing, they're parsing for relevance and keywords, not checking your letter's origin.
What that means for how you write it
Generic cover letters reused across applications tend to rank lower for a simple reason: they don't closely echo the specific language of any one posting. Pulling a handful of exact terms and requirements from the job description into your letter, in your own words and tied to real examples, gives both screening layers more to match against. Keep the structure clean and specific rather than trying to sound clever or unusual, since a ranking system rewards clear relevance over style. Tailoring each letter takes more time upfront, but it's the single most reliable way to move up the stack before a person even opens your file.