It seems Apple has decided that money is the only language it understands when faced with the lure of AI companies trying to poach its top talent. Recent reports reveal that the Cupertino tech giant has begun offering exceptional and unusual bonuses to iPhone designers in a desperate attempt to stem the exodus of engineers and designers to startups, particularly OpenAI. As the race toward AI-powered devices intensifies, Apple finds itself compelled to defend its human capital at all costs.
Off-schedule bonuses
According to a Bloomberg report, Apple distributed restricted stock units (RSUs) this week to select members of its iPhone product design team. These bonuses ranged in value from $200 to $400, significant sums even for Silicon Valley engineers. Interestingly, these bonuses were "off-the-record," meaning they weren't part of the planned annual bonuses but rather an immediate response to an internal emergency.
These shares won't become employee property immediately; employees must remain with the company for four years before they can fully redeem them—a classic strategy to keep employees with the company for as long as possible. The Product Design Group, overseen by Rich Dinh within the Hardware Engineering division led by John Ternos, is responsible for the design and vital functions of Apple's flagship devices, and losing any component of this group would disrupt the company's innovation process.
The ghost of OpenAI and Jony Ive haunts Cupertino
The anxiety within Apple's corridors is not unfounded; this time, the fiercest competitor is OpenAI. The blow is compounded by the fact that OpenAI's hardware division is led by Tang Tan, a former Apple veteran who managed the very same iPhone product design team now receiving the rewards. Tang Tan didn't leave alone; he took with him dozens of engineers who worked on developing the iPad, the Apple Watch, and the Vision Pro headset.
To make matters worse, OpenAI enlisted former Apple design legend Jony Ive to help develop a secret consumer AI device. It seems OpenAI doesn't just want to build language models; it wants to build devices that could threaten the iPhone's dominance in the future, and who better to do that than Apple's own engineers?
War of Attrition and New Rivals
OpenAI wasn't the only threat; other startups also entered the fray, such as Hark Company Founded by Brett Adcock, this company has already succeeded in attracting engineers from Apple such as Obaid Choudhry, the industrial designer who worked on the anticipated iPhone 17 Air, as well as other engineers such as Jack McCambridge and Alex Gold.
While Apple's $400,000 bonuses may seem substantial, they pale in comparison to what its competitors are offering. Some reports indicate that AI companies are offering talented engineers up to $1 million a year in stock options to lure them away. It's a veritable talent drain, and Apple is fighting tooth and nail to stay afloat.
Apple responds with its own devices
This brain drain comes at a critical moment for Apple, as the company struggles to catch up in generative artificial intelligence. While others are trying to build iPhone replacements, Apple is developing an arsenal of new AI-powered devices to safeguard its ecosystem. Current projects include AirPods with built-in cameras, a smart necklace without a screen, and AI-powered smart glasses.
Apple is no stranger to these tactics; it used similar rewards three years ago and increased salaries for its AI modeling team last year to counter offers from Meta and Google. Now, as Apple approaches its 50th anniversary next month, the company seems determined to keep its best minds within its walls, not in the offices of its competitors.
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