According to TechSpot, internal financial data shows OpenAI is distributing an average of roughly $1.5 million in stock-based compensation per employee across its 4,000-person staff. This figure, adjusted for inflation, is seven times higher than Google’s pre-IPO equity pay in 2003 and 34 times larger than the typical pre-IPO tech company over the past 25 years. The pay surge accelerated after Meta CEO Mark Zuckerberg began offering packages worth hundreds of millions to senior AI researchers, which lured away over 20 OpenAI employees including a ChatGPT co-creator. In response, OpenAI issued one-time retention bonuses worth millions and eliminated its six-month equity vesting cliff. The company projects these compensation costs will grow by $3 billion annually through 2030 and will account for a staggering 46% of total revenue by 2025.
The New Silicon Valley Math
Here’s the thing: these numbers aren’t just big. They’re fundamentally different. For decades, the pre-IPO playbook was to use equity as a sweetener, a promise of future riches to offset lower cash salaries. Stock-based comp was typically a single-digit percentage of revenue. For Facebook, it was 6%. For Google, 15%. OpenAI is looking at 46% by next year. That’s not a sweetener; that’s the whole cake. It completely inverts the traditional financial model of a scaling tech company. They’re basically betting the entire farm, today, on locking down the brains they think will own tomorrow. And when you’re in a winner-take-most race for artificial general intelligence, maybe that’s the only math that matters.
A Talent War With Nuclear Options
This didn’t happen in a vacuum. The catalyst was Meta’s all-out blitz, with Zuckerberg reportedly offering billion-dollar packages to key people. That’s not competing on salary. That’s financial warfare. When you lose a co-creator of your flagship product, you don’t just match offers. You have to redefine the market entirely. So OpenAI did. They removed the standard vesting cliff, which is a huge risk. Now, an employee who gets a massive grant and walks out the door a month later still takes it all with them. It signals pure, unadulterated desperation to keep people in their chairs. The question is, can any other company, even giants like Google or Apple, keep up with this pace without blowing up their own carefully managed compensation structures?
The Burning Money Machine
Let’s talk about what this means for the business. Projecting an additional $3 billion in stock-based comp every year through 2030 is a stunning admission. It tells investors that astronomical operating losses and serious shareholder dilution aren’t just temporary pains—they’re the core strategy. The company is willingly setting money on fire at a scale we’ve never seen to fuel this talent engine. It makes you wonder about the endgame. Is the plan to grow revenue so astronomically that even 46% of it is sustainable? Or is this a high-stakes gamble that assumes total market dominance will make today’s costs look trivial? Either way, it raises the stakes for every other firm in AI. They either play this ruinously expensive game or risk getting left with the B-team.
Redefining What’s Competitive
So what’s the fallout? OpenAI has effectively broken the market for AI talent. A “competitive” offer for a senior researcher now likely starts in the tens of millions. For start-ups without OpenAI’s war chest or Meta’s bottomless balance sheet, this is an existential threat. How do you hire when the benchmarks are being set by companies willing to spend like there’s no tomorrow? You can’t. This level of compensation creates a moat made of pure cash, one that only a handful of entities can possibly cross. It consolidates power and innovation in maybe three or four companies. In one sense, it’s a logical extreme of Silicon Valley’s talent obsession. In another, it feels like the point where the engine of innovation starts to choke on its own fuel.
