Openai is the unquestionable poster child of the AI Revolution, the company that forced the world to pay attention to the launch of Chatgpt. But behind the scenes, a hopeless and wildly expensive battle is raging, and the cost of holding the company’s geniuses in the house becomes astronomical.
According to a recent report of The informationOpenai revealed to investors that its stock compensation for employees increased more than five times last year to amazing $ 4.4 billion. This figure is not just big; It is more than all of the company’s revenue for the year, accounting for a stationary 119% of its $ 3.7 billion income.
This is an unheard of figure, even for Silicon Valley. For comparison, Google’s share compensation was only 16% of its income the year before its IPO. For Facebook, it was 6%.
So what’s going on? In short, Openai is fighting for his life in an unprecedented talented war, and its main rival, Meta, is on the offensive. Mark Zuckerberg personally sentenced to top AI researchers with massive compensation packages, successfully hitting several key minds from Openai’s core teams. This reportedly prompted an emergency at Openai, forcing it to “recalibrate compensation” and promise even more rewarding wage packages to prevent a catastrophic brain.
While stock compensation is not immediately burning with company money reserves, it creates a significant risk by diluting the value of shares held by investors. Every billion dollars in shares delivered to employees means that the slices of the cake owned by major supporters such as Microsoft and other corporate capital firms decrease.
Openai is trying to sell this strategy as a long -term vision. The company projects that this mass spending will fall to 45% of revenue this year, and below 10% by 2030. In addition, Openai is reportedly discussed a future plan, where its employees would collectively own about one third of the restructured company, with Microsoft also owning another third. The goal is to make employees deeply invested partners who have a massive incentive to stay and build.
But the “meta -effect” throws a key into those good projections. The aggressive beating and the following payballs mean that the costs of Openai are likely to remain ubiquitous.
The stakes for Openai
This high financial strategy puts Openai in a precarious position. The company is already spending billions of dollars a year, as it spends a lot of the computer power needed to operate its models. Adding billions more in stock compensation puts huge pressure on the company to drastically increase revenue and find a way to profitable before its investors breathe.
While Microsoft seems locked up for the long skin, other investors may be tired as their ownership diluted so heavily. It forces a countdown timer on the company to deliver a massive financial return to justify the cost.
Openai was founded with a mission to build an artificial general intelligence (Action), which “benefits all humanity.” This expensive talented war, fed by capitalist competition, puts a huge pressure on that founding ideal. It becomes more difficult to prioritize security and ethics when you burn billions to prevent your best minds from joining the competition.
Finally, Openai is betting on these billions to make sure it has the best talent to win the race to create the world’s first true superintelligence. If they succeed, the financial cost will seem insignificant. If they fail, or if a competitor arrives first, they will spend themselves in a hole for nothing.
Openai did not immediately respond to a request for comment.
