Name: OpenAI’s pay packages dwarf pre-IPO tech peers
Uploaded: 2025-12-31T20:31:06.007Z
Duration: 2 min 59 s
Description: CNBC’s MacKenzie Sigalos reports on OpenAI’s investor decks showing average stock-based compensation around $1.5 million per employee — far above pre-IPO peers like Google.

CNBC’s MacKenzie Sigalos reports on OpenAI’s investor decks showing average stock-based compensation around $1.5 million per employee — far above pre-IPO peers like Google.

San Francisco

The release of Open AI's ChatGPT has accelerated the development of artificial intelligence and warnings about its impact on society.

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OpenAI's stock-based compensation for employees is substantially higher than that of other major technology companies prior to their initial public offerings. According to analysis, OpenAI's per-employee stock compensation is 34 times the average of 18 other large tech firms in the year before they went public, and the company expects this figure to continue rising by $3 billion annually through 2030.

The company is currently in a highly competitive phase, increasing compensation to retain both top and mid-tier talent as it competes with rivals like Google Gemini. OpenAI's equity spend is projected to reach 46% of its revenue, and if the company goes public, it could result in significant wealth for employees and a notable tax windfall for San Francisco.

OpenAI’s pay packages dwarf pre-IPO tech peers

McKenzie Sigalos joining us now from San Francisco, Mac, these are big numbers. They really are. When you compare it to other companies out here in Silicon Valley, it really just puts it into perspective. So let's start with Google, right? Before it filed to go public in 2004, it disclosed stock-based comp and adjusted for inflation. It was roughly one-seventh of what OpenAI is paying now. And if you zoom it out to a broader peer set, the gap gets even wider. OpenAI's per-employee stock comp is about 34 times the average at 18 other large tech companies in the year before they went public, according to a Wall Street Journal analysis. And those same investor decks, Brian, they show that OpenAI expects stock-based comp to rise by roughly $3 billion a year through 2030. All right. So because, as I referenced on the intro, you know, math, average is the most misused word out there, because if you got one guy or one woman making $100 million, it can skew the average. Do we know? And maybe we don't. Is everybody just making a bundle, or are there a couple of just superstars just printing gigantic sums of money? You can certainly assume that there are a handful of MVPs that are garnering nine-figure salaries that are helping to skew that number higher. But what I will say is that OpenAI has been in the midst of this code red period where it's been all hands on deck looking to shore up their models because Google Gemini has made such strides. That's long hours during the holiday. It is a finite period that this code red that's supposed to end in January. And so people across the board, not just the people who are building the LLMs, but some of your mid-tier talent want to be compensated. And it's such a competitive market that OpenAI realizes it needs to pay up. And another data point for you here, OpenAI's equity spend is projected to hit 46 percent of revenue this year. For context, Palantir was at 33 percent before its IPO. Little history. I was actually on the train. There is a train, believe it or not, from Mountain View, California to San Francisco today. Google, I would say IPO, but it was a Dutch auction anyway. A lot of the people on the train were employees that got really rich or people literally weeping and throwing champagne. I've got to imagine that these employees, when and if they go public at OpenAI, they're not only going to be hugely rich themselves, but the entire region and the city of San Francisco where you currently sit. That is a real shot behind you, Mackenzie, that they're going to have a huge tax windfall. The mayor has got to be happy about that. Not a green screen. Bay Bridge behind me. I mean, when you look at these numbers and we were talking about who stands to gain the most if OpenAI goes public in 2026, we know that at least internally they are working through the mechanics of how to do that. We were talking about that in the context of SoftBank yesterday, their 10 percent stake. Microsoft has a 27 percent stake. They've already 10x their investment to $135 billion, but certainly a lot of very newly minted billionaires out here in San Francisco, and yes, they will have to pay taxes.

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OpenAI’s pay packages dwarf pre-IPO tech peers

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