Hundred-million-dollar pay packages are no longer exclusive to sports superstars like Shohei Ohtani and Cristiano Ronaldo. In Silicon Valley, these eye-watering figures are reportedly being offered to top talent as the race to dominate artificial intelligence (AI) reaches a fever pitch. Meta, the tech giant formerly known as Facebook, has allegedly made offers of up to $300 million over four years to top OpenAI researchers for its new Superintelligence Lab, according to a report by Wired. Meanwhile, OpenAI’s CEO Sam Altman claimed in June that his employees were being enticed with $100 million signing bonuses to defect.
Meta spokesperson Andy Stone has dismissed these reports as “untrue,” suggesting that the size and structure of these compensation packages have been widely misrepresented. Regardless of the exact figures, it is clear that a select few researchers are being courted with salaries that could rival those of CEOs at other major tech firms. A Business Insider analysis of Meta’s federal filings revealed that software engineers at the company can earn up to $480,000 in base salary alone.
AI Talent: The New Sports Stars
The burgeoning demand for AI experts far exceeds the current supply, prompting companies like Meta to offer outsized salaries to lure talent. This is part of a broader strategy to pivot from the metaverse to AI, as Meta aims to realize CEO Mark Zuckerberg’s vision of a personalized AI for every user. A former Meta engineer, who continues to work in the tech industry, noted that “top tech talent is finally being treated like top sports,” which has fueled resentment among other tech workers, particularly those with longstanding careers in the industry.
The lucrative offers underscore the widening chasm between elite AI talent and the rest of the workforce. Natalia Luka, a scholar in economic sociology at the University of California, Berkeley, remarked, “It doesn’t make sense for engineers, no matter how experienced, to make NBA players’ salaries.” She pointed out that the exorbitant sums tech companies are spending on AI talent, computing power, and data centers are creating immense pressure to cut costs elsewhere.
Layoffs Amidst Lavish Salaries
While top AI employees receive staggering offers, thousands of tech workers face job insecurity. Microsoft recently announced the layoff of 9,000 employees, adding to the 15,000 job cuts it has made this year. Since the onset of the COVID-19 pandemic, tech companies have been trimming their workforce after a period of overhiring. According to Layoffs.fyi, over 600,000 tech workers have been laid off since 2022.
Despite these layoffs, the tech sector continues to grow, with jobs expected to expand twice as fast as other sectors over the next decade, as reported by CompTIA, a trade association for the IT industry. However, the disparity between high-paid AI talent and the broader workforce has raised concerns. A former Meta engineer expressed worry that the field is fundamentally changing, with companies primarily hiring senior talent, potentially stifling the development of the next generation of engineers.
Meta’s Superintelligence Lab: A Divisive Move
Meta’s new Superintelligence Lab, led by 28-year-old Alexandr Wang and staffed with recent hires from OpenAI and DeepMind, has sparked skepticism among some employees. Screenshots from a Meta employee group on Blind, shared with Business Insider, reveal doubts about the lab’s purpose, with one employee calling it “marketing BS to feed the media.” Concerns have also been raised about the potential sidelining or layoffs of Meta’s existing GenAI team.
As companies continue to invest heavily in AI, other workers are being cut to cover the costs. Meta’s recent $14 billion acquisition of nearly half of Scale AI exemplifies this trend. Big Tech firms, including Google and Meta, are leveraging AI to enhance efficiency, but the focus on AI may detract from other areas of innovation and investment, potentially diminishing opportunities for non-AI workers, according to Tim Herbert, chief research officer at CompTIA.
The Future of AI Talent Compensation
The intense competition for AI talent extends beyond Meta and OpenAI, with companies willing to pay more even at lower levels. As of April 2024, entry-level AI engineers earned 8.5% more than their non-AI counterparts, according to Levels.fyi. Mid- and senior-level AI engineers earned about 11% more. Bain & Company reports that demand for AI skills has grown by 21% annually since 2019.
While some employees are discontented with the pay gap, others understand its rationale. A current engineer in Meta’s GenAI team stated, “I cannot produce that kind of impact and hence do not deserve that kind of compensation.” They believe that if the Superintelligence team succeeds, all employees will benefit through stock options.
Sonny Tambe, a professor at the Wharton School, likens the current AI talent rush to previous tech innovation booms, where few possessed the necessary skills. However, he notes that the stakes are higher now, with faster-paced advancements and significant rewards for market leaders. Experts are skeptical that superstar salaries will become the norm, as more individuals are trained to lead AI teams. Natalia Luka predicts that the market will eventually adjust, expanding the talent pool capable of managing large AI systems.
For now, a two-tier system seems to be emerging within Meta, with “Superintelligence” recruits described as “the chosen few” on Blind. One employee sarcastically remarked that GenAI workers might end up “labeling data for minimum wage.” Despite the challenges, it’s an opportune time for those at the forefront of AI innovation.
Amanda Hoover is a senior correspondent at Business Insider covering the tech industry. She writes about the biggest tech companies and trends. Pranav Dixit is the Meta Correspondent at Business Insider based in the San Francisco Bay Area.
