OpenAI is changing how it pays new employees as the race for AI talent gets more intense

OpenAI

OpenAI is changing how it pays new employees, and the reason says a lot about how intense the race for AI talent has become.

According to a report by The Wall Street Journal, OpenAI has decided to end a long-standing rule that required new employees to stay at the company for a set period before earning their first share of company equity. Until now, workers had to wait months before that equity became theirs. That waiting period is known inside the tech world as a vesting cliff.

The change was shared with staff last week by Fidji Simo, OpenAI’s head of applications. The idea behind it is simple. New hires should feel free to take risks without worrying that they might be let go before getting access to any equity at all. People familiar with the decision say OpenAI wants employees to focus on building, not on whether they will make it past an arbitrary deadline.

Earlier this year, OpenAI had already shortened this waiting period to six months, down from the usual one year that most tech companies follow. Now, it has gone even further by removing the requirement altogether. The move puts OpenAI among a small but growing group of AI companies rethinking old rules to stay competitive.

The pressure to do so is coming from all sides. AI researchers and engineers are in extremely high demand, and companies like Meta, Google, Anthropic, and xAI are offering eye-popping pay packages to lure top talent. In some cases, total compensation can run into tens of millions of dollars or more. With so many options on the table, workers are less willing to accept rigid terms or stick around in roles they do not like.

OpenAI is already spending heavily to keep its workforce happy. Financial documents seen by the Journal show the company expects to spend about $6 billion this year on stock-based pay, nearly half of its projected revenue. Some investors have privately complained that such spending is getting out of hand and could hurt long-term returns.

Still, experts say this shift was almost inevitable. According to Zaheer Mohiuddin of Levels.fyi, companies facing fierce competition are increasingly dropping traditional rules that once helped filter out short-term hires.

OpenAI’s rival xAI has made similar changes. After struggling with departures and recruiting challenges earlier this year, the company quietly shortened its own vesting period. Since then, people involved in hiring say more candidates have been willing to accept offers.

All of this points to a bigger trend. In today’s AI boom, talent holds the power. Companies are rewriting the rules not because they want to, but because they have to.