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“Software engineers working in AI earned 48% more than the average software engineer at the company, according to a payroll spreadsheet shared with BI.”https://t.co/4PXy0RkaMu
— Jason ✨👾SaaStr 2025 is May 13-15✨ Lemkin (@jasonlk) January 11, 2025
So a newer issue that is discussed a lot at start-up board meetings and investor meetings is AI Engineer comp.
In general, I find most start-ups want to keep engineering comp fairly flat. Back in the day, my CTO just wanted 3 tiers: entry level, top IC, manager. That was it. 3 pay bands, and they were very tight. Equity varied a lot more, but I know it was important to my CTO that everyone on his team felt like equal stakeholders, relative to experience.
I do think this is true at most start-ups, today too. They want fairly consistent comp across engineering, and fear if nothing else, lots of issue if favorites are played, the new “guy” gets a better deal, etc.
But AI is challenging this.
No start-up can compete with OpenAI”s massive comp and annual tender offers to provide partial liquidity. But it has created a two-tiered comp system for engineers. The “AI Team” often makes a lot more.
I don’t have any answers here but I found the above Business Insider article with a leaked Microsoft memo helpful:
- They pay AI engineers 48% more
- They have special spot retention bonuses for AI engineers to keep them
This is roughly what I see, too. The “AI Team” at many SaaS startups makes 30%-40% more. It creates issues and drama.
But probably not paying their premium will create just as many issues and drama as well.
What I often see is many SaaS companies aren’t truly AI-native and often just have 1 or 2 true AI magicians on the team. The ones that really make the AI magic happen. And you often can’t afford to lose them. Are they worth 48% more? Fairness aside — of course they are.
