Maybe they should call it Open-Pay-I.
OpenAI is reportedly paying its employees more than any major tech startup, showering workers with an average of $1.5 million each in stock-based compensation — a staggering sum that amounts to nearly half of the company’s projected 2025 revenue.
The unusually rich payouts, disclosed in financial materials reviewed by investors, put OpenAI far ahead of peers, with stock compensation averaging more than seven times what Google paid employees before its 2004 IPO and roughly 34 times the average at other major tech companies ahead of their public debuts.
The largesse reflects OpenAI’s aggressive push to retain top artificial-intelligence talent as competition intensifies, with equity awards swelling operating losses and rapidly diluting existing shareholders, according to the investor materials obtained by the Wall Street Journal.
Across its roughly 4,000-person workforce, the equity payouts translate into one of the most expensive payrolls Silicon Valley has ever seen, with OpenAI’s stock-based compensation projected to climb by about $3 billion a year through 2030, the data shows.
The spending surge accelerated after Meta CEO Mark Zuckerberg began dangling nine-figure — and in some cases, billion-dollar — pay packages to poach elite AI researchers, triggering defections from OpenAI and forcing the company to sweeten retention bonuses.
The recruiting battle intensified over the summer after Meta’s hiring blitz lured away more than 20 OpenAI employees, including a co-creator of ChatGPT, prompting the startup to issue one-time bonuses worth millions of dollars to some research and engineering staff.
The generous pay has come as OpenAI races to defend its position in generative AI — even as the equity-heavy compensation inflates losses and reportedly pushes stock-based pay to about 46% of projected revenue in 2025, the highest level among major tech startups analyzed.
OpenAI recently told employees it would scrap a policy requiring them to stay at the company for at least six months before equity begins vesting — a move that could further drive up compensation as workers gain faster access to lucrative stock awards, according to The Journal.
OpenAI’s pay structure dwarfs that of most large tech companies, which traditionally spend about 6% of revenue on stock compensation in the year before their IPOs, according to data compiled by Equilar.
Google spent about 15% of revenue on stock-based compensation ahead of its 2004 IPO, while Facebook’s figure was roughly 6% before it went public in 2012, according to data compiled by the Journal.
Founded in 2015 as a nonprofit, OpenAI initially rejected profit motives altogether.
That stance shifted in 2019, when the company created a capped-profit subsidiary to attract outside investment. OpenAI justified its decision at the time by arguing that the cost of advanced AI research had grown too large to sustain through philanthropy alone.
The evolution accelerated in recent years as OpenAI sought ever-larger funding rounds to finance the growing costs of large-scale AI research.
After public backlash, legal threats and internal debate, the company completed a restructuring earlier this year that left it operating under a hybrid model. Its commercial arm now functions as a public benefit corporation, while the original nonprofit foundation retains control and a significant equity stake.
The Post has sought comment from OpenAI.
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