OpenAI has eliminated equity vesting cliffs altogether, allowing new hires to access stock-based compensation immediately, according to a Wall Street Journal report published on Saturday. The move removes all waiting periods that previously delayed equity payouts for incoming employees.
Applications chief Fidji Simo informed staff this week that the ChatGPT maker would end the policy with immediate effect. Until now, new employees were required to complete six months at the company before their first tranche of equity vested. The change reflects how aggressively OpenAI is repositioning itself in an increasingly cutthroat race for elite AI researchers and engineers—where compensation packages can now cross the $100 million mark.
The Journal reported that Simo framed the decision as a way to give new hires more freedom to take risks, without worrying that an early exit could cost them unvested equity.
The end of a long-standing Silicon Valley norm
This is the second time in less than a year that OpenAI has loosened its equity framework. In April 2025, the company had already reduced the traditional 12-month vesting cliff to six months, a move that was seen as unusually generous at the time. The complete removal of the cliff now suggests that even that step was only transitional.
Competitors are making similar adjustments. Elon Musk’s xAI reportedly eliminated its own vesting cliff over the summer, after facing challenges in attracting talent amid leadership churn and public controversy. Together, these shifts point to a broader recalibration across the AI industry, where long-standing compensation practices are being discarded in favour of far more aggressive incentives.
“Companies that are needing to be more competitive are dropping the traditional first-year vesting cliff,” Zaheer Mohiuddin, co-founder of tech compensation tracker Levels.fyi, told the WSJ.
A costly strategy under investor scrutiny
The generosity comes with a heavy financial burden. OpenAI is expected to spend around $6 billion on stock-based compensation this year—nearly half of its projected revenue—based on internal financial documents reviewed by the Journal. Some tech investors have privately expressed concern that such soaring compensation costs could significantly dilute shareholder returns.
Yet OpenAI appears to have limited room to maneuver. In August, Meta CEO Mark Zuckerberg initiated what the Journal described as a “full-scale raid” on OpenAI’s workforce, offering signing bonuses nearing $100 million to top researchers. To counter the threat, OpenAI issued one-time bonuses worth millions of dollars to retain key talent.
Talent pressure amid competitive headwinds
These compensation decisions are unfolding alongside mounting competitive pressure. CEO Sam Altman recently declared a “code red” after Google’s Gemini 3 reportedly outperformed OpenAI models on several industry benchmarks. However, Altman told CNBC that he expects the company to move out of crisis mode by January, following the December release of GPT-5.2.
Taken together, OpenAI’s latest move signals how profoundly the AI boom is reshaping not just technology roadmaps, but also the economic rules governing how top talent is hired, retained, and rewarded.
