Inside OpenAI's $1.5 million compensation packages

Core Insights - OpenAI is set to pay its employees $1.5 million in stock-based compensation per employee in 2025, a figure unprecedented in Silicon Valley history [1] - This compensation level is significantly higher than what previous tech giants offered before going public, adjusted for inflation [2] - The competition for AI talent has intensified, with compensation packages for individual employees resembling those typically reserved for founders [3] Compensation Dynamics - As generative AI models become integral to corporate strategies, researchers and engineers with relevant expertise are among the highest-paid employees globally [4] - The competitive landscape forces rival firms to make substantial offers to attract and retain talent, leading to a bidding war that escalates costs [6] - OpenAI has adjusted its internal equity rules to remain competitive, including removing a waiting period for stock awards to vest [7] Financial Implications - Compensation now accounts for 50% of OpenAI's annual revenue, a notably high percentage that contributes to operating losses and dilutes existing shareholders [8]