Elon Musk and Sam Altman have been in a long-running feud over generative artificial intelligence, and while the jury is still out on whether or not this technology is a bubble waiting to pop, we can say one thing for certain: Employees of both companies are hitting it big.
A new report from Business Insider published today shows that both Musk’s xAI and Altman’s OpenAI are paying handsomely to acquire the key talent needed to build their AI bots. The report looks at the salaries of engineers from both startups using publicly available visa application data that companies must file in order to hire foreign workers. The data includes position titles and salaries, and it shows that Musk’s hellbent desire to beat OpenAI has done nothing if not put more money in engineers’ pockets.
Business Insider compared the salaries of employees at both startups against the industry’s prevailing wage for similar roles and found that xAI and OpenAI respectively pay their employees 37% and 87% above the average. The Department of Labor collects data on prevailing wages, defined as the average wage paid to workers in particular occupations within a defined geographic area.
xAI only has about 100 employees right now and has filed visa applications for 10 roles with the lowest-paid engineer receiving $250,000 and the highest-paid netting $500,000. One employee at xAI, a principal machine learning engineer, was paid almost double the government-defined prevailing wage. OpenAI has thousands of employees with salaries ranging from $145,000 to $530,000. The salary range is wider there in part because OpenAI has many more administrative employees.
None of this new data should be terribly surprising. The entire tech industry is going through a massive AI hype cycle, and every company needs to throw the buzzword around in order to please investors. The likes of Google and Meta are also competing for AI talent as they hope to ride the AI wave and fuel further growth. Business Insider’s analysis did not look at wages offered by those companies. The data also doesn’t include stock-based compensation.
Add on top of that the history between Musk and Altman. The former is a jilted lover who gave up his position at OpenAI over diverging views, only for the company to become a global sensation just a few years later. It’s like breaking up with a girl only for her to have a massive glow-up years later.
Musk has raised billions of dollars to try and win it back, creating his own competing AI company and chatbot in the form of Grok that he has said would produce the most free speech-forward chatbot of them all. He’s attached it to X in order to somewhat salvage the $44 billion purchase of that company as well. Between the two ventures, more than $50 billion has been invested—this is a big swing for Musk. It will be a major hit to his ego if xAI and its Grok chatbot were to fail.
Musk is also using the courts to try and win, suing OpenAI in a bid to stop it from converting into a for-profit company. OpenAI was started by Musk and Altman as a non-profit focused on AI safety, but the company continually needs cash to fuel its ambitions, and investors aren’t going to want to put in much more if it remains a convoluted non-profit. While Musk is correct in that he did provide the initial funds with the express purpose of creating a public benefit, emails revealed in court also show he pushed the idea of becoming a for-profit company years ago specifically so it could have an easier time raising money. This lawsuit, then, is really just an attempt to slow OpenAI down.
As part of the lawsuit, Musk has said OpenAI is using exorbitant salaries in a manner meant to stifle competition. Everyone in tech seems to be a free market maximalist until they aren’t.
