OpenAI is compensating its employees at levels rarely seen in Silicon Valley, underscoring the intensity of the battle for artificial intelligence talent. According to financial materials reviewed by investors and reported by the Wall Street Journal, OpenAI is paying workers an average of about $1.5 million each in stock-based compensation, a figure that represents nearly half of the company’s projected 2025 revenue.
The payouts place OpenAI far ahead of major technology peers ahead of their public listings. The average stock compensation is more than seven times what Google paid employees before its 2004 initial public offering and roughly 34 times the average at other major technology companies prior to going public. Across OpenAI’s workforce of roughly 4,000 employees, the equity awards translate into one of the most expensive payroll structures the technology sector has seen.
Investor materials indicate that stock-based compensation could rise by about $3 billion annually through 2030, significantly swelling operating losses and diluting existing shareholders. In 2025 alone, equity compensation is expected to account for about 46% of projected revenue, an unusually high ratio even by startup standards.
The strategy reflects OpenAI’s effort to secure and retain elite researchers as competition among AI labs accelerates. Rivals including Meta, Google, and Anthropic have stepped up recruiting, offering increasingly aggressive compensation packages to attract scarce expertise in large language models, infrastructure, and AI safety.
Meta’s Hiring Push Raises the Stakes
The compensation surge intensified after Meta Platforms began offering nine-figure, and in some cases billion-dollar, pay packages to recruit top AI researchers. Over the summer, Meta reportedly hired more than 20 OpenAI employees, including a co-creator of ChatGPT. In response, OpenAI issued one-time bonuses worth millions of dollars to some research and engineering staff to stem further departures.
OpenAI has also relaxed internal policies to make its compensation more attractive. The company recently informed employees that it would eliminate a rule requiring workers to remain at the company for at least six months before equity begins vesting. Faster vesting schedules can increase near-term compensation costs while making offers more competitive in a tight labor market.
By comparison, most large technology companies spend about 6% of revenue on stock-based compensation in the year before an IPO, according to Equilar. Google’s figure was about 15% before its public debut, while Facebook spent roughly 6% ahead of its 2012 listing. OpenAI’s current levels far exceed those benchmarks.
From Nonprofit Roots to Capital-Intensive Model
Founded in 2015 as a nonprofit research lab, OpenAI initially rejected profit-driven incentives. That position changed in 2019, when the company created a capped-profit subsidiary to attract outside capital, arguing that the rising cost of advanced AI research could no longer be supported through philanthropy alone.
In recent years, OpenAI has raised increasingly large funding rounds to finance model development and infrastructure. Earlier this year, the company completed a restructuring that left it operating under a hybrid model. Its commercial arm now functions as a public benefit corporation, while the original nonprofit retains control and a significant equity stake.
As OpenAI weighs a potential IPO and continues to expand its AI systems, its compensation strategy highlights a central tension facing the industry: the need to attract rare talent while managing ballooning costs in a business already defined by heavy capital spending.
