Apple Inc. awarded rare bonuses to iPhone hardware designers this week, aiming to stem a wave of departures to AI startups like OpenAI that are building their own devices.
The company 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.
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.
The bonuses were issued as stock units that vest over four years, meaning employees must remain at Apple to receive the full value, said the people, who asked not to be identified because the move wasn't public. It's a typical structure for Apple stock-based pay packages.
In many cases, the awards — separate from Apple's typical bonuses — are worth roughly $200,000 to $400,000 over the full vesting period. The packages could ultimately offer a bigger payoff depending on the company's stock performance.
A spokesperson for the Cupertino, California-based company declined to comment.
Read More: Apple Ramps Up Work on Glasses, Pendant, and Camera AirPods for AI Era
Employees see the pay bumps as a direct response to a recent uptick in recruiting from startups. Still, the bonuses are a fraction of what OpenAI and others are offering. In some cases, those companies are paying individual Apple engineers roughly $1 million in stock annually to jump ship.
OpenAI's hardware division is run in part by Apple veteran Tang Tan. He used to oversee the iPhone product design team that's receiving the bonuses.
Tan's group at OpenAI has hired several dozen Apple engineers, and not just ones who worked on the iPhone. The startup has lured employees who helped develop the iPad, Apple Watch and Vision Pro.
Apple's iPhone product design group is now run by longtime executive Rich Dinh and is located within its hardware engineering division under John Ternus. Product design, or PD, is responsible for engineering the look and functionality of products, as well as executing the vision of the industrial design team.
New startups, meanwhile, continue to target the device market. This past week, Figure AI founder Brett Adcock outlined plans for a new AI gadgets company called Hark. The firm's lead designer, Abidur Chowdhury, was an industrial designer for the iPhone Air. The startup has also hired Apple product design engineers Jack McCambridge and Alex Gould.
OpenAI and Hark are developing families of AI devices aimed at supplanting the iPhone as consumers' primary hardware. Apple, for its part, is working to counter the shift with its own lineup of AI-driven products, including smart glasses, new AirPods, and a pendant equipped with the Siri assistant and computer-vision cameras.
The industry's rapid shift to AI caught Apple flat-footed, and engineers and designers have increasingly been on the lookout for new opportunities.
While the bonuses are unusual, it's not the first time Apple has taken such a step. During poaching concerns three years ago, the company handed out similar packages, Bloomberg News reported at the time.
Last year, during a talent war for AI researchers, Apple also increased pay for its in-house models group. At the time, Meta Platforms Inc. was making employment offers worth more than $100 million in some cases.
The loss of key engineering talent — from rank-and-file employees to senior leaders — is emerging as one of Apple's biggest headwinds as it approaches its 50th anniversary next month.
ALSO READ: Apple Launches iOS 26.4 — Here Are 11 Features To Test Now
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.