OpenAI Eliminates the 1-Year Vesting Cliff for Employees
OpenAI Eliminates the 1-Year Vesting Cliff for Employees
Author: Peter Walker
Read time: 1 minute
Published date: December 15, 2025
OpenAI's move to day-one equity vesting is a dramatic change designed to win the talent war against other AI labs competing for the same scarce engineering...
Will OpenAI change the way startup equity works for everyone?
Unlikely. But this move is still pretty interesting.
Eliminating the vesting cliff on their employee equity means that if you join OAI tomorrow, you start getting real equity from day 1. No waiting around for a year for the first 25% of your equity package to become real.
Why would they make such a drastic move? The 1-year cliff has been a retention mechanism for decades among tech startups.
- They face immense competition for research talent, usually from the most well-capitalized firms in the world so they must think...
- Missing out on top talent for any reason is a bigger risk to the business than having someone walk away after 6 months with a considerable sum of money.
- The equity they offer is way more liquid than the equity at your standard startups (or even late-stage scaleup).
Pretty sure that most startups will not follow suit here, but it highlights the massive gap between in-demand AI talent and everyone else these days.
The average comp package for a startup employee hired in 2025 is actually 50% lower than it was in 2022 (and not because of startup valuations - we're talking literal share amounts here).
But the compensation for AI/ML engineers is up 30%+ in the last 12 months alone.
Haves vs have-nots. In hiring, in fundraising, in every part of the venture market.
Maybe 2026 is the year where we see even early-stage startups experimenting with new versions of the standard 4-year vest with a 1-year cliff model.
Author: Peter Walker
Peter Walker runs the Insights team at Carta, focused on discovering key data and narratives across the private capital ecosystem. In a former life, he was a marketing executive for a media analytics startup and led the data visualization team at the Covid Tracking Project.