$1.5 million! OpenAI's average employee salary skyrockets, setting a new record in tech history

OpenAI is paying its employees the highest compensation levels in the history of technology startups. According to the Wall Street Journal on Wednesday, the average stock-based compensation for the company's roughly 4,000 employees reaches about $1.5 million, far surpassing the pre-IPO compensation levels of all major tech companies over the past 25 years. This compensation level is more than seven times the amount disclosed by Google before its IPO in 2003. Based on an analysis of Equilar data, OpenAI’s average stock-based compensation is about 34 times the average level for the year prior to IPO across 18 large tech companies in the past 25 years. All figures have been adjusted to 2025 dollars to reflect inflation. Financial data disclosed to investors this summer shows that OpenAI’s stock compensation is expected to increase by about $3 billion annually before 2030. The company also recently notified employees that it will abolish a policy requiring staff to work at OpenAI for at least six months before receiving equity, which could lead to further increases in compensation. This aggressive compensation strategy is driving up the company’s operating losses and rapidly diluting existing shareholders’ equity. But amid the white-hot AI race, OpenAI needs to spend heavily to retain top researchers and engineers in order to maintain its leadership in artificial intelligence. Compensation-to-revenue ratio hits record high Analysis shows that OpenAI’s compensation will account for 46% of its revenue in 2025, second only to Rivian among the companies analyzed—Rivian generated no revenue the year before its IPO. By comparison, Palantir’s stock compensation accounted for 33% of its revenue the year before its 2020 IPO, Google 15%, and Facebook 6%. According to Equilar data, tech companies analyzed by the Wall Street Journal averaged just 6% of revenue going to stock compensation in the year before IPO. These numbers highlight the huge costs OpenAI is bearing to maintain its talent competitiveness and reflect the intense battle for top talent in today's AI industry. Meta's poaching sparks compensation arms race After the AI arms race intensified this summer, frontier labs like OpenAI faced pressure to raise employee compensation. Meta Platforms CEO Mark Zuckerberg began offering compensation packages worth hundreds of millions of dollars to executives and researchers from rival companies—and in rare cases, up to $1 billion. Zuckerberg’s recruitment drive attracted more than 20 OpenAI employees, including ChatGPT co-creator Shengjia Zhao. According to previous Wall Street Journal reporting, in August this year, OpenAI issued one-time bonuses to some research and engineering staff, with some employees receiving millions of dollars. Risk warning and disclaimer: The market carries risks, and investments must be made cautiously. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of any individual user. Users should consider whether any opinions, viewpoints, or conclusions contained in this article fit their particular circumstances. You bear sole responsibility for any investment decisions made based on this article.