AI: OpenAI vs Meta in white hot AI Talent Race. RTZ #755

The quest for AI talent has never been fiercer in this AI Tech Wave. And more expensive. At least in the US. (more on that in a bit).

That AI talent is a scarce input is a topic covered for a while in these pages. That it’s being bid up at every level is also not a surprise. Just see the recent flurry of AI ‘acqui-hires’, the most recent one being Meta’s $15 billion ‘investment’ in Scale.ai. Microsoft, Google, xAI, OpenAI and others have all been engaged in their versions of late.

Nowhere has the competition for AI talent been fierecer than AI Research folks. We are still at the stage where AI technologies are still being baked in universities around the world. So the technologies have to be innovated on, before converting them to commercial products. And of course AI talent is needed for that phase as well. Up and down the AI Tech Stack below, from the infrastructure at its foundation, to the applications up on top.

And the big tech companies themselves have been keenly focused on positioning their companies to attract the best and brightest AI Researchers. Often that means support for open source AI options even when their business opportunities and commercial instincts veer more to the closed side.

Again, Meta has been a leader on this front with its aggressive support for open source LLM AIs. Another attractive feature for AI Research talent.

This AI talent race keeps accelerating as per the latest from OpenAI founder/CEO Sam Altman, on its ongoing competition for industry talent. Especially vs Meta.

Techcrunch lays it out well in “Sam Altman says Meta tried and failed to poach OpenAI’s talent with $100M offers”, citing a podcast discussion with his VC youngest brother Jack Altman (left below, with middle brother Max on right):

“Meta CEO Mark Zuckerberg has been on something of a hiring spree lately, trying to staff up Meta’s new superintelligence team with top-tier AI researchers from competing labs. To work on a team led by former Scale AI CEO Alexandr Wang and at a desk physically near Zuckerberg, Meta has reportedly offered employees from OpenAI and Google DeepMind compensation packages worth upwards of $100 million.”

“OpenAI CEO Sam Altman confirmed those reports on a podcast with his brother, Jack Altman, which was published on Tuesday. However, the OpenAI CEO noted that Zuckerberg’s recruiting efforts have been largely unsuccessful and made sure to throw a few more digs at Meta in the process.”

“[Meta has] started making these, like, giant offers to a lot of people on our team,” Sam Altman said on the podcast.

“You know, like, $100 million signing bonuses, more than that [in] compensation per year […]

“I’m really happy that, at least so far, none of our best people have decided to take him up on that.”

Quite the headline numbers.

“The OpenAI CEO said he believed his employees made the assessment that OpenAI had a better chance of achieving AGI and may one day be the more valuable company. He also said he believes Meta’s focus on high compensation packages for employees, rather than the mission of delivering AGI, would likely not create a great culture.”

“Meta reportedly tried to poach one of OpenAI’s lead researchers, Noam Brown, as well as Google’s AI architect, Koray Kavukcuoglu. However, both efforts were unsuccessful.”

OpenAi of course is fighting back with every resource at its disposal, up and down the AI Scaling research and product work:

“Sam Altman went on to say he believes OpenAI’s culture of innovation has been a major key to its success, and that Meta’s “current AI efforts have not worked as well as they hoped.” The OpenAI CEO said he respects many things about Meta but noted he doesn’t “think they’re a company that’s great at innovation.” Later in the podcast, Altman said he believes it’s not enough for companies to catch up on AI — they have to truly innovate to stay ahead.”

“The OpenAI CEO’s comments highlight some of the challenges that Meta has to overcome in order to build out a successful AI superintelligence lab. Besides bringing on Wang, Meta announced last week that it invested significantly in Wang’s former company, Scale AI. The company has also reportedly nabbed a few star AI researchers, such as Google DeepMind’s Jack Rae and Sesame AI’s Johan Schalkwyk. But there’s more work ahead.”

Zuck’s latest senior ‘hire’ Alexandr Wang, the founder/CEO of Scale is but the latest addition.

“In the coming year, Meta will have to staff up its new AI team while OpenAI, Anthropic, and Google DeepMind operate at full speed. In the coming months, OpenAI is expected to release an open AI model that’s likely to set Meta back in the AI race even further.”

“Later on in the podcast, Sam Altman described an AI-powered social media feed that seems likely to encroach on Meta’s apps. The OpenAI CEO said he’s curious about exploring a social media app that uses AI to deliver custom feeds based on what users want, rather than the default, algorithmic feed that exists on traditional social media apps.”

The competition with Meta in particular around AI is perhaps worth as much attention as the competition between OpenAI and Google around AI Search and AI Browsers.

“OpenAI is reportedly working on a social networking app internally. Meanwhile, Meta is experimenting with an AI-powered social network through its Meta AI app. However, it seems that some users are confused by the Meta AI app and have shared some hyperpersonal chats with the broader world.”

“Whether AI-powered social networks take off remains to be seen. In the meantime, Zuckerberg and Sam Altman seem poised to butt heads over the AI talent race.”

The core point is that is a battle for the attention of billions. And to create those applications and services requires AI talent at Scale, while getting AI to Scale. Not just crazy, expensive AI Infrastructure.

The above narrative for the white hot race for AI talent in the US maybe all that would have been to the story in earlier tech waves. We’ve seen short-term spikes for tech talent in almost every earlier tech wave, from PC to Internet to Cloud to Mobile and now here. None of course at these types of dollar figures.

But then, neither have we seen AI capex infrastructure budgets at hundreds of billions per year.

The key difference this time though is that the AI Tech Wave is not just a US only race. As Nvidia founder/CEO Jensen Huang constantly reminds us, ‘half the world’s AI Researchers’ are in and from China.

And generally speaking, the AI research and commercial talent race in China is nowhere at the US levels. Despite their AI innovating companies like DeepSeek, Alibaba, Manus and many, many others.

So for the first time in this tech wave, the global tech talent ‘race’ or ‘war’ has a unique arbitrage opportunity.

And that needs to be factored in especially as our policy makers continue to frame the AI opportunity as a geopolitical ‘Race’, imbued with national security concerns. And drive the immigration efforts currently underway, especially with foreign students from India and China, who are the seed corn for AI research talent yet to come.

The current salacious bonuses and salaries for the top AI research talent is but a drop in the bucket, and just the tip of a VERY big iceberg, in the AI talent market.

One needs to keep in mind that this competition is a global one.

And US interests in this AI Tech Wave for its companies maybe best served longer term, while keeping that in mind. Stay tuned.

(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)