With AI startups offering bigger pay, Apple rolls out bonuses to retain engineers

Apple has begun offering rare, out-of-cycle bonuses to its iPhone hardware engineers as it seeks to retain talent amid intensifying competition from artificial intelligence startups.

The bonuses, worth between $200,000 and $400,000 over a multi-year period, are aimed at discouraging engineers from leaving for companies such as OpenAI, which have been offering significantly higher pay, Bloomberg reported.

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A RESPONSE TO INTENSIFYING TALENT COMPETITION

The move reflects growing pressure on Big Tech companies as AI firms aggressively recruit experienced engineers.

According to Bloomberg, some AI startups are offering compensation packages of up to $1 million annually in stock to attract talent from established companies. Apple’s bonuses, while substantial, remain lower than these offers.

Employees view the bonuses as a direct response to increased poaching attempts, particularly from AI-focused companies building next-generation hardware and software systems.

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STRUCTURE OF THE BONUSES

The incentives are being issued as stock units that vest over four years, meaning employees must remain with the company to receive the full payout.

These payments are “out-of-cycle”, separate from Apple’s regular compensation and bonus structure, making them an unusual intervention for the company.

Bloomberg noted that Apple has used similar retention strategies in the past, including during a period of heightened recruitment competition three years ago.

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AI TALENT WAR DEEPENS

The retention push comes against the backdrop of a broader talent war in the AI sector, where startups are competing with large technology firms for specialised engineering talent.

OpenAI has reportedly hired several former Apple engineers in recent years, including Tang Tan, a former vice president of product design at Apple who now serves as chief hardware officer at the AI company.

Other departures to AI firms and technology competitors highlight the shifting talent landscape, where engineers with experience in hardware and advanced systems are in high demand.

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WHY APPLE IS ACTING NOW

Apple’s response underscores the strategic importance of retaining key talent as it navigates its own AI roadmap and future hardware innovations.

The company has been investing in next-generation products, including AI-integrated devices, and maintaining continuity within its design and engineering teams is seen as critical to execution.

Apple’s move signals a more proactive approach to talent retention as competition from AI startups continues to intensify.

However, the effectiveness of such measures remains uncertain. While bonuses may help retain some employees, rivals can still outbid with more aggressive compensation packages.

The broader challenge for Apple—and the wider tech industry—will be balancing compensation, innovation and culture in a market where the demand for AI talent continues to outpace supply.