How OpenAI vs. xAI Engineer Salaries Differ: A Comparison of Pay for AI Talent
In the battle for AI talent, two of the most prominent companies—OpenAI and xAI—are offering competitive salaries to attract top engineers. Despite criticisms from xAI founder Elon Musk about OpenAI’s spending, data reveals that both companies are paying substantial salaries to their engineering teams.
Elon Musk’s Lawsuit Against OpenAI and Criticism of Salary Practices
In August, Elon Musk filed a lawsuit against OpenAI, accusing the company and CEO Sam Altman of offering “lavish bonuses” that were aimed at “starving competitors.” Musk, who co-founded OpenAI in 2015 and later launched xAI in 2023, has long been vocal about his views on the company’s operations. His lawsuit and the accusations of excessive spending on talent highlight a larger trend in the AI industry: a “massive” war for talent, with both companies offering enticing compensation packages.
To better understand the scale of this competition, Business Insider analyzed salary data from both OpenAI and xAI’s visa applications for 2024. These visa applications, filed when hiring foreign workers on special H-1B visas, include detailed salary information, providing a glimpse into the financial battle for skilled engineers in the AI sector.
Comparing xAI and OpenAI: Company Size and Salary Data
Although both companies aim to lead in AI innovation, they differ significantly in size. xAI, Musk’s more recent venture, employs around 100 people. In contrast, OpenAI, the company behind ChatGPT, is significantly larger with approximately 3,000 employees, according to PitchBook data.
The salary data filed with U.S. Immigration and Customs Enforcement reveals striking differences between the two companies’ pay structures. xAI reported salary information for just 10 employees on specialized visas, while OpenAI provided data for 86 employees. Both companies exceed the industry average salary, known as the “prevailing wage,” by a considerable margin.
– xAI’s Salary Range: For the 10 employees reported, xAI offers salaries ranging from $250,000 to $500,000, with the highest-paying position being a senior machine learning engineer.
– OpenAI’s Salary Range: OpenAI’s salary range for the 86 visa applications is slightly broader, ranging from $145,000 to $530,000. Some highly skilled engineers earn up to three times the prevailing wage for their roles.
On average, excluding the highest-paying positions at both companies, salaries for OpenAI positions are about 55-93% of what xAI offers, according to Business Insider’s findings.
Salary Breakdown and Industry Context
A look at previously compiled data from Bloomberg further illuminates the compensation scale at OpenAI. Many engineers at OpenAI earn between $200,000 and $370,000 per year, with specialized roles reaching $450,000. When factoring in bonuses, total compensation for some of OpenAI’s engineers can exceed $800,000 annually.
These figures reflect the high demand for AI talent and the financial muscle that both OpenAI and xAI are using to attract and retain top engineers. The lucrative salaries are part of the broader efforts to establish dominance in the AI field, where skilled engineers are crucial to developing cutting-edge technologies like GPT and other machine learning models.
The Impact of Salary on the AI Industry and Musk’s Legal Battle
Musk’s legal battles with OpenAI extend beyond salaries. He has filed and refiled lawsuits against OpenAI, accusing the company of violating antitrust laws. His legal complaints claim that OpenAI, which is transitioning into a for-profit organization, is attempting to stifle competition by discouraging investment in rival companies. In November, Musk expanded his complaint to include Microsoft, alleging that the company, along with OpenAI, is engaging in anti-competitive behavior.
Despite these legal challenges, OpenAI remains a formidable player in the AI space. The company, which completed a funding round in October 2024, saw its valuation soar to $157 billion, signaling investor confidence in its future.
OpenAI’s shift to a for-profit structure is part of a broader strategy to attract more investment to fuel its ambitious AI projects. The company’s rising valuation is a testament to its growing influence in the AI market, as well as its ability to offer substantial salaries to its engineers.
A Fierce Competition for AI Talent
As the AI industry continues to expand, the competition for top engineering talent will only intensify. Both OpenAI and xAI are offering massive salaries to attract the best and brightest minds in machine learning and artificial intelligence.
While Elon Musk has criticized OpenAI’s spending and filed legal challenges against the company, the data shows that both organizations are paying well above the industry standard. This salary battle reflects the high stakes involved in the development of cutting-edge AI technologies, with companies like OpenAI and xAI vying for dominance in the rapidly evolving field.
Ultimately, as the battle for talent continues, the salary figures will likely only grow, further cementing the value of engineers in the AI sector. Whether through legal battles or compensation packages, Musk and OpenAI are both making moves to ensure their place at the forefront of AI innovation.
