OpenAI Abolishes Vesting Cliff Policy to Spur Innovation

In a move that could be intended to spur greater innovation internally, OpenAI has reportedly told its employees that they do not have to wait for six months before their equity vests. The ChatGPT maker has ended its “vesting cliff” policy in order to incentivise its staffers to take more risks without worrying about being laid off before they earn their first equity in the $500 billion-dollar AI startup, according to a report byWall Street Journal. The announcement was reportedly made by Fidji Simo, OpenAI’s chief of applications. Most tech companies reportedly have a one-year vesting cliff for new employees. This allows the companies to avoid giving away stock to hires who do not plan on staying at the firm for long and end up leaving quickly. Initially, OpenAI had shortened its vesting period for new employees to six months earlier this year. Elon Musk’s xAI has made a similar change to its vesting cliff policy, as per the report.