AI $100M Offers¶

Talent Wars, Defence Contracts, and Premium Pricing

The AI industry is currently characterised by an intense war for top talent, with extraordinary compensation packages being offered. OpenAI and Meta are emerging as key rivals in this battle. Simultaneously, OpenAI is expanding its reach into government and defence contracts, signifying a significant shift in its operational strategy. Furthermore, a new trend of premium AI service tiers, priced at around $200 per month, is gaining traction, indicating a market for high-usage, predictable access.

Topics¶

AI $100M Offers

1. The AI Talent War: Astronomical Compensation and Strategic Poaching¶

The competition for leading AI researchers has reached unprecedented levels, with compensation packages now regularly entering the nine-figure range.

Meta's Aggressive Recruitment: Mark Zuckerberg's Meta is actively attempting to poach OpenAI researchers for a 50-person superintelligence team. Sam Altman of OpenAI confirmed these efforts, stating, "Meta has started making these giant offers to a lot of people on our team, you know like $100 million signing bonuses, more than that in compensation per year. It's crazy."
Hyperbolic or Literal? While initial reports of "hundreds of millions of dollars range" in compensation packages were met with scepticism, Altman's comments suggest these figures are literal. Elvis Aravia commented, "Insane they weren't kidding when they said pro alete level type of compensation." OpenAI's Retention Strategy: Despite these lucrative offers, Altman claims that "none of our best people have decided to take him up on that." He speculates that his staff believe OpenAI has a "much better shot of actually delivering on super intelligence and also may eventually be the more valuable company."
Culture vs. Compensation: Altman criticises Meta's approach, arguing, "I think the strategy of a ton of upfront compensation and that being the reason you tell someone to join really the degree to which they're focusing on that and not the work and not the mission i don't think that's going to set up a great culture."
Notable Refusals: Nome Brown, a leading reasoning and agentics expert who left Meta for OpenAI in 2023, turned down a recent offer from Meta. Brown stated his choice to join OpenAI was "financially not the best option that I had," highlighting the importance of alignment with work and mission over pure financial incentives.
Industry Rivalry: Altman openly positions Meta as a significant competitor, stating, "I've heard that Meta thinks of us as their biggest competitor... I don't think they're a company that's great at innovation. I think we understand a lot of things that they don't." This suggests a brewing rivalry beyond just talent acquisition.

2. OpenAI's Expansion into Government and Defence Contracts¶

OpenAI has secured its first significant Pentagon contract, marking a strategic shift towards military and governmental partnerships.

First Pentagon Contract: OpenAI has announced a $200 million contract with the Pentagon, their first under a new entity called "OpenAI for Government." This entity will also encompass previous initiatives with US National Labs, NASA, and the US Treasury.
Scope of the Pentagon Contract: The contract involves helping "identify and prototype how Frontier AI can transform its administrative operations from improving how service members and their families get healthcare to streamlining how they look at program and acquisition data to supporting proactive cyber defense."
Evolving Stance on Military Use: This contract represents a culmination of OpenAI's evolving policy on military and warfare usage. In January of last year, they removed a total ban, and after the White House's national security memorandum on AI in October, they clarified their "red line was using our technology to harm people, destroy property or develop weapons." They previously announced a partnership with Anduril for anti-drone targeting systems.
Pentagon's Perspective: The Pentagon was more direct about the contract's implications, stating OpenAI had been brought aboard to "develop prototype frontier AI capabilities to address critical national security challenges in both warfighting and enterprise domains."
Potential Microsoft Rift: This direct partnership with the Pentagon could create a "further wedge between OpenAI and their increasingly estranged partner Microsoft," given Microsoft's extensive government contracts and its hosted OpenAI service's recent approval for all classification levels. The question is whether "the Pentagon is actually just cutting Microsoft out of the deal."

3. The Rise of Premium AI Service Tiers¶

A new pricing model for AI services, particularly a $200 per month premium tier, is gaining significant momentum, indicating a demand for high-usage, predictable access.

Cursor's Ultra Plan: Cursor has launched a "$200 a month tier that they are calling their ultra plan." This subscription offers "20 times more usage than the pro tier" and aims to provide "more predictability than usagebased pricing would offer."
Following OpenAI's Lead: OpenAI first introduced a $200 a month top-tier subscription, which was initially met with scepticism but proved "very popular for power users who are willing to pay for unlimited usage and priority access to new models and features." Anthropic has also followed suit with its own $200 tier.
Meeting Power User Demands: This pricing model caters to "dedicated users that just want to pay a monthly fee and stop thinking about how much they're using the tool."
Cursor's Rapid Growth and Valuation: Separately, Cursor is reportedly "fielding offers to raise funds at a valuation between 18 billion and 20 billion." The company, which recently closed a Series C raising $900 million at a $9.9 billion valuation, recently hit "$500 million in ARR, a 60% increase in 2 months, good enough to be considered at this point the fastest growing startup in the history of Silicon Valley."

Detailed Timeline¶

Pre-2023:¶

Date Unknown (Prior to 2023): Meta's Mark Zuckerberg begins forming a 50-person "superintelligence team" drawn from leading AI labs. Anonymous rumours circulate about compensation packages for this team reaching hundreds of millions of dollars.

2023¶

January 2023: OpenAI removes its total ban on military and warfare usage of its technology.
October 2023: The White House releases the National Security Memorandum on Artificial Intelligence.
Shortly after October 2023: OpenAI clarifies its "red line" for military usage, stating it will not allow its technology to be used to harm people, destroy property, or develop weapons.
Shortly after October 2023: OpenAI announces a partnership with Anduril to work on anti-drone targeting systems.
December 2023: OpenAI announces a £200-a-month top-tier subscription for its services, offering unlimited usage and priority access. Many in the industry initially consider this pricing to be "nuts."
Date Unknown (2023): Nome Brown leaves Meta to join OpenAI, despite receiving financially better offers from other major industry players. He chose OpenAI due to their willingness to support the work he was excited about.
Recent Past (Specific dates not provided, but within the last few months/weeks):

2025¶

July : Reports discuss £20 million compensation packages as the extreme end for top-tier AI researchers.
April: Microsoft announces that its hosted OpenAI service has been approved for all classification levels by the US federal government.
Recently: Anthropic follows OpenAI's lead by offering its own £200-a-month tier for its AI services, allowing users to avoid usage limits.
Two Weeks Ago: Cursor closes its Series C funding round, raising £900 million at a £9.9 billion valuation.
Recently: Cursor's Annual Recurring Revenue (ARR) hits £500 million, a 60% increase in two months, making it the fastest-growing startup in Silicon Valley history.
Recently: Sam Altman (OpenAI CEO) appears on his brother Jack Altman's podcast and confirms that Meta's Mark Zuckerberg is attempting to poach OpenAI researchers with nine-figure offers, including £100 million signing bonuses and more in annual compensation. Altman expresses happiness that "none of our best people" have taken these offers so far.
Recently: Nome Brown, a leading reasoning and agentics expert, is approached by Meta for recruitment but turns down the offer.
The head of engineering for Google's Gemini chatbot is reported to be leaving Google.

Current/Ongoing Events:¶

Ongoing: The £200 premium price point for AI services continues to gain momentum in the industry.
Current: Cursor launches its "Ultra Plan" at £200 a month, offering 20 times more usage than its Pro tier and aiming for predictability over usage-based pricing. Their £20-a-month plan is also upgraded to unlimited access subject to rate limits.
Current: OpenAI announces it has secured its first Pentagon contract, valued at £200 million. This project falls under a new entity called "OpenAI for Government," which will also encompass previous initiatives with US National Labs, NASA, and the US Treasury. The Pentagon contract involves using Frontier AI for administrative operations, healthcare for service members, streamlining programme and acquisition data, and supporting proactive cyber defence. The Pentagon also states OpenAI has been brought aboard to "develop prototype frontier AI capabilities to address critical national security challenges in both warfighting and enterprise domains."
Current: Bloomberg reports that Cursor has been fielding offers to raise funds at a valuation between £18 billion and £20 billion, though Cursor denies initiating these conversations and may not raise funds at this time.

Cast of Characters¶

Sam Altman: CEO of OpenAI. He is a prominent figure in the AI industry, critical of Meta's recruitment strategy, and believes OpenAI has a better chance of delivering on superintelligence and becoming a more valuable company. He also suggests Meta views OpenAI as its biggest competitor.
Mark Zuckerberg: CEO of Meta. He is actively trying to poach top AI talent, particularly from OpenAI, with extremely high financial offers to build a 50-person superintelligence team.
Jack Altman: Brother of Sam Altman and host of a podcast on which Sam Altman appeared, confirming Meta's poaching attempts.
Nome Brown: A leading reasoning and agentics expert. He left Meta in 2023 to join OpenAI, turning down financially superior offers because he preferred OpenAI's commitment to his preferred work. He has recently turned down another offer from Meta.
Elvis Aravia: A commentator who reacted to the news of Meta's compensation offers, calling them "Insane" and "pro athlete level."

FAQ¶

Why are AI researchers being offered such high compensation packages? AI researchers are reportedly being offered unprecedented compensation packages, with figures reaching into the hundreds of millions of dollars annually, including nine-figure signing bonuses. These extreme offers, particularly from companies like Meta, highlight the intense competition for top AI talent in Silicon Valley. The scarcity of highly skilled individuals capable of advancing superintelligence and other cutting-edge AI technologies drives up their market value, leading companies to offer exorbitant sums to poach them from competitors.
What is Meta's strategy for building its superintelligence team? Meta, under Mark Zuckerberg, is reportedly attempting to recruit a 50-person superintelligence team by offering extremely high compensation packages to leading AI researchers from rival labs like OpenAI. This aggressive recruitment drive suggests a significant investment and focus by Meta on becoming a major player in the development of advanced AI, particularly in the realm of superintelligence.
How is OpenAI responding to Meta's recruitment efforts? OpenAI CEO Sam Altman has publicly acknowledged Meta's aggressive offers to his researchers but has stated that, so far, none of their top talent has accepted. Altman speculates that his staff believe OpenAI offers a better chance of "actually delivering on superintelligence" and may ultimately be a more valuable company. He also critiques Meta's strategy, suggesting that an overemphasis on upfront compensation rather than the work and mission may not foster a great culture.
What is the significance of Nome Brown's decision to join OpenAI over Meta? Nome Brown, a leading expert in reasoning and agentics, turned down a lucrative offer from Meta to join OpenAI, despite it being "financially not the best option." Brown's decision, after meeting with every major industry player, underscores the appeal of OpenAI's mission and its willingness to invest resources in the work researchers are passionate about, even when other companies offer significantly higher financial incentives. This suggests that for some top talent, factors beyond compensation, such as mission alignment and intellectual freedom, are paramount.
What is OpenAI's evolving relationship with the military and government? OpenAI has significantly shifted its stance on military and warfare usage of its AI technology. After lifting a total ban in January last year and clarifying its red line as not harming people, destroying property, or developing weapons, OpenAI has begun actively partnering with government entities. This includes securing its first Pentagon contract valued at $200 million for administrative operations, and previous initiatives with US National Labs, NASA, and the US Treasury. These collaborations are now managed under a new entity called "OpenAI for Government," indicating a strategic move into the public sector, which could also create friction with its partner, Microsoft, given Microsoft's existing extensive government contracts.
What is the trend for premium pricing in AI services? The trend of premium pricing for AI services, particularly at the $200 a month price point, is gaining momentum. OpenAI first introduced this tier for its top-tier subscription, which proved popular with power users seeking unlimited usage and priority access. Anthropic followed suit, and now companies like Cursor are adopting this model. This high-tier subscription caters to "power users" who prefer a predictable monthly fee and unlimited access over usage-based pricing, demonstrating a willingness among a segment of users to pay significantly more for enhanced service and convenience.
What is Cursor's current valuation and growth trajectory? Cursor, an AI tool company, has reportedly been fielding offers to raise funds at a valuation between $18 billion and $20 billion. This comes shortly after they closed their Series C funding, raising $900 million at a $9.9 billion valuation just two weeks prior. The company has recently achieved $500 million in Annual Recurring Revenue (ARR), marking a 60% increase in just two months. This rapid growth has led some to consider it the fastest-growing startup in Silicon Valley's history, although Cursor itself has denied the funding reports, stating a focus on product and team development.
What potential rivalry is emerging between OpenAI and Meta? A significant rivalry appears to be brewing between OpenAI and Meta. Sam Altman has publicly stated that he believes Meta views OpenAI as its biggest competitor. While acknowledging Meta's aggressiveness and willingness to try new things, Altman has also critiqued Meta's innovation capabilities, stating, "I think we understand a lot of things that they don't." This suggests a competitive tension beyond just the scramble for talent, hinting at fundamental differences in their approaches to AI development and potentially their long-term visions.