The buzzword everyone is looking for is "high-agency." (No, not those agents, but yes, those will help.) Basically employers want someone who will start something from scratch and take it to the finish line by themselves.
The interesting thing about this is, it is by definition not something you can put on your resume; It is something you show, not tell.
Yes, you need to do this even as you go through the absolute hell that is a job search. But trust me, this will a) help get a much better job, and b) help in the long run throughout and beyond your career. This will be the most valuable skill in the future.
You don’t need to use AI, but looking at the timeframes and skills in demand, yes, you very likely want to use AI.
A few other thoughts:
1. Target an area you are very familiar with. This will sharply cut down the time to MVP. This will be a challenge for the more junior folks, who should consider reaching out to senior mentors. Mentors, consider outsourcing a suitable personal project to them.
2. It could be something you are an expert on at work, if your employment contract and IP laws allow. As a bonus, releasing this as open source, or even a competing product if you’re so inclined, will have that intangible bonus of sticking it to your ex-employer.
3. Even if heavily using AI, keep your hands-on skill active. Most companies still do old-school leetcode interviews.
4. Bonus if you do something multi-disciplinary. Sprinkle in a domain you have no background in -- design, writing, sales, marketing, data science, frontend, whatever. You'll definitely need AI for this, and even when you make mistakes, few will harshly judge somebody down on their luck trying to expand their boundaries.
Hope this helps, and all the best!