This article first appeared on GuruFocus.
OpenAI had to pay $6 billion in stock-based compensation to keep its top developers after Meta (META, Financials) started one of Silicon Valley’s most costly personnel wars. Meta’s “recruiting blitz,” directed by CEO Mark Zuckerberg, offered multimillion-dollar and billion-dollar incentives to steal AI specialists from rivals.In response, OpenAI increased average employee stock rewards to $1.5 million34 times more than pre-IPO norms at comparable large tech corporations. Employees may now earn shares instantly after the business scrapped its six-month vesting cliff.Significant financial effect. OpenAI’s stock compensation accounts for 46% of its $13 billion yearly income, compared to 6% for mature technology businesses. This amount is expected to climb as OpenAI hires more people and accelerates AI model development through 2030.This highlights the fierce rivalry in frontier artificial intelligence, where Meta, OpenAI, and Google (GOOGL) are competing for top researchers. Altman’s retention decision, even at high dilution, shows OpenAI’s dedication to technical leadership despite rising wages.
