OpenAI has set a record in employee compensation, granting approximately 4,000 employees stock options worth an average of $1.5 million each—an unprecedented figure in startup history, as reported by The Wall Street Journal. This amount is seven times higher than stock options for Google employees before its IPO and 18 times more than those for other major tech firms. OpenAI’s spending on salaries and benefits is projected to hit 46% of its revenue this year, significantly higher than Google’s 15% or Facebook’s 6% during similar pre-IPO periods. This surge in compensation reflects fierce competition for top AI talent, especially after Meta’s aggressive recruitment strategy. As OpenAI’s substantial compensation packages lead to growing operational losses and shareholder dilution, concerns about the company’s long-term sustainability and the potential for an AI sector bubble are intensifying. The company is expected to face even higher compensation costs, with projections of an additional $3 billion by 2030.
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