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Apple has awarded out-of-cycle bonuses worth up to $400,000 to iPhone design engineers to curb poaching by AI rivals like OpenAI. The restricted stock payouts vest over four years to encourage retention. However, competitors are reportedly offering up to $1 million annually, intensifying the ongoing talent war in AI hardware.

The AI poaching scare is real. Apple is fighting back against a growing brain drain to AI rivals. The iPhone maker has awarded an unusual round of out-of-cycle bonuses to its hardware design team, a move Bloomberg reports is a direct response to aggressive recruiting from OpenAI and other AI startups building the next generation of consumer devices.

Apple granted out-of-cycle bonuses worth several hundred thousand dollars to many members of its iPhone Product Design team, according to people with knowledge of the matter. The bonuses were issued as restricted stock units that vest over four years, meaning employees must remain at Apple to receive the full value. Most packages range from $200,000 to $400,000, though the final payout will depend on Apple's stock performance.

OpenAI poaching several employees

Apple's leadership has grown increasingly concerned about the number of engineers being poached by potential rivals. OpenAI, which has tapped former Apple design chief Jony Ive to help design a new generation of AI-centric products, has emerged as a particular threat. OpenAI's hardware division is run in part by Apple veteran Tang Tan, who previously oversaw the very iPhone product design team now receiving the bonuses. Tan's group at OpenAI has hired several dozen Apple engineers, not just those who worked on the iPhone, but also employees who helped develop the iPad, Apple Watch, and Vision Pro.