"OpenAI to Offer Immediate Stock Compensation to New Hires"

Intensifying Talent War
Contrasting with AI-Driven Job Restructuring

As competition to secure talent in the artificial intelligence (AI) sector intensifies, OpenAI, the developer of ChatGPT, has decided to offer stock compensation to new hires as well, the Wall Street Journal (WSJ) reported on December 14 (local time).

Reuters Yonhap News

According to the WSJ, Fijsi Simo, CEO of OpenAI's application division, recently announced to employees that the company is abolishing the 'vesting cliff' policy, which required a mandatory period of employment before exercising stock options. This comes eight months after the company relaxed the required period from the industry standard of 12 months to 6 months last April. CEO Simo explained that this policy change is intended to encourage new employees to take bold risks without the anxiety of being dismissed before receiving stock compensation.

The WSJ analyzed that this decision by OpenAI reflects the intensifying competition among tech companies to secure AI talent. In fact, competitors such as Meta and Google have offered pay packages exceeding 100 million dollars to recruit AI researchers.

On the other hand, OpenAI faces limitations in immediately raising salaries due to the high labor and compensation costs relative to its revenue. As a result, OpenAI appears to be trying to retain talent by offering stock compensation, which could significantly increase in value in the future. According to investor documents obtained by the WSJ, OpenAI is expected to spend about 6 billion dollars on stock-based compensation this year, which amounts to half of its estimated annual revenue.

The WSJ also reported that xAI, the AI company led by Tesla CEO Elon Musk, has seen an increase in new hires accepting job offers after shortening the required employment period for stock compensation.

This fierce competition among major tech companies to recruit AI talent stands in stark contrast to the trend of large-scale workforce reductions driven by AI. While positions that can be replaced by AI are subject to restructuring, the industry is not hesitating to offer substantial compensation to top-tier AI talent, highlighting the growing polarization in the tech labor market.