OpenAI Reserves $50 Billion for Stock Grant Pool
The Takeaway
- OpenAI established a $50 billion employee stock grant pool.
- Massive stock pool highlights OpenAI’s aggressive talent acquisition.
- Total employee equity now comprises 26% of the company.
OpenAI last fall set aside an employee stock grant pool worth 10% of the company, which was valued in October at $500 billion, according to two people with knowledge of the plans. The $50 billion pool of restricted stock units should last for roughly five years and should rise in value as the company’s private share price continues to increase.
The employee stock grant pool, which hasn’t previously been reported, stands out for its size relative to the stock compensation expenses of much larger rivals such as Meta Platforms and Google. The move shows that OpenAI plans to continue spending heavily on recruiting and rewarding talent after a surge in employee-related expenses in the last two years.
OpenAI has already awarded about $80 billion in vested equity, according to a different person with knowledge of the company’s plans. Last year alone, employees sold about $10 billion worth of shares to other investors, according to the person, an unprecedented amount for a company only a decade old.
The vested equity, along with the $50 billion employee stock grant pool, comprises about 26% of the company following a corporate restructuring last fall. The process converted profit-sharing units held by stakeholders including Microsoft into traditional stock.
For context, OpenAI’s $50 billion pool for future rewards is three-quarters of the $66 billion Meta spent on stock compensation from 2020 to late 2025, even though Meta was expected to generate 15 times as much revenue as OpenAI last year.
The OpenAI grant pool’s value is likely to increase soon. The company is in talks to raise as much as $100 billion at a roughly $750 billion valuation before the financing.
Amid the war for AI talent, OpenAI has projected about $20 billion in additional stock compensation charges between 2025 and 2030 compared to projections made early last year. The projections from the summer expect stock-based compensation to be roughly $10 billion this year and $13 billion next year, ramping to nearly $21 billion by 2030, according to one of the people with knowledge of the plans.
The plans follow an intense fight for the AI researchers that companies like Meta, Google’s Gemini, Microsoft and Anthropic see as instrumental in improving their models to produce AI that’s as smart as or smarter than humans.
Last year, Meta lured valuable researchers from OpenAI and other AI firms with huge salaries and stock grants, spending hundreds of millions of dollars on signing bonuses, cash salaries and equity compensation.
Some of OpenAI’s former employees have left to form rival companies. Ilya Sutskever, a co-founder and former chief scientist at OpenAI, held $4 billion in vested OpenAI equity in late 2023, court filings recently revealed. At the time, OpenAI Chief Operating Officer Brad Lightcap estimated OpenAI employees’ vested equity at $29 billion (the total company was about to be valued at roughly $86 billion in a share sale). The company then employed nearly 800 people; the figure has risen to about 4,000 today.
Investors in any of these companies, however, may be wary of such spending on stock awards. Issuing new shares to fund equity-based compensation dilutes the value of existing shares. Public companies frequently offset this dilution by buying back shares, something OpenAI can’t afford to do, given that it’s burning billions of dollars in cash every year.
New grants since the restructuring have come from this $50 billion pool, said one of the people. Although it isn’t clear how much of the pool OpenAI has given to employees thus far, its executives have said privately they don’t expect to allocate the full stock award pool, according to one of the people. Some investors expect the company to hand it out faster than five years, say in three years, said the other person.