OpenAI’s Stock Compensation Reflect Steep Costs of Talent Wars

OpenAI has signaled it will hike pay for some employees in the wake of a raid by Meta Platforms on its artificial intelligence researchers. That could mean a significant increase in the billions of dollars in stock awards it already accounts for, threatening to further dilute investors after a planned corporate restructuring.

The San Francisco startup has told investors stock-based compensation jumped more than five times last year, to $4.4 billion. The increase meant stock expenses amounted to 119% of total revenue for the same period. That proportion—a common way investors track stock compensation—was projected to decline to a still-high 45% of revenue this year. But as revenue soars at the end of the decade, the ChatGPT maker expects stock-based compensation to fall to under 10%, according to projections seen by The Information.