Musk Hiked Tesla AI Pay to Fight OpenAI. xAI Is Poaching Too

Elon Musk raised Tesla AI engineer salaries in April 2024, saying OpenAI was “aggressively recruiting Tesla engineers with massive compensation offers.” He announced the increase “contingent on progress milestones” in a reply on X, hours after news broke that his own private AI startup xAI had just hired a Tesla machine-learning scientist.

The same week, Musk’s private AI startup was the one moving Tesla engineers out the door. Knight’s move was the third reported Tesla-to-xAI transfer in recent months, per The Information. Tesla shareholders were the ones funding the pay bump to keep the rest of the team in place. The Knight-to-xAI pipeline, Musk’s January 2024 demand for 25% voting control, and the salary bump were all part of the same quarter.

Why Musk Said the Salary Hike Happened

The trigger was the news, on April 3, 2024, that Tesla machine-learning scientist Ethan Knight had joined xAI. The Information reported Knight had been overseeing the team working on computer vision for Tesla’s self-driving technology. Within hours, Musk had taken to X to reframe the move as something OpenAI had forced on him.

“Ethan was going to join OpenAI, so it was either xAI or them,” Musk wrote in a reply to Tesla investor Sawyer Merritt, who had asked: “Is Tesla matching these compensation offers? Or is it more than these employees just want to switch things up, so matching wouldn’t matter?” Musk used the same thread to announce the salary bump: “Tesla is increasing comp (contingent on progress milestones) of our AI engineering team.” The full exchange ran on X that night. Musk’s X thread on the OpenAI recruiting Sawyer Merritt’s question that started the thread

Musk’s longer accusation: OpenAI “has been aggressively recruiting Tesla engineers with massive compensation offers and [has] unfortunately been successful in a few cases,” he wrote. Musk and OpenAI CEO Sam Altman have a public feud that goes back years, and Musk is actively suing Altman over an alleged breach of contract, Fortune reported. Musk had also lured his first AI director away from OpenAI in 2017, the same outlet noted.

Where the Engineers Are Actually Going

Musk pushed back on Merritt’s reference to Knight as Tesla’s “computer vision chief,” saying the title was overstating things. The full team, Musk wrote, includes over 200 excellent engineers. Tesla’s “pace of progress with autonomy is accelerating,” he added in the same thread, the framing meant to make the Knight departure look small.

The count of Tesla engineers heading to xAI told a different story. The Information reported Knight was the third Tesla engineer to leave the car company for xAI in recent months, with Fortune, reporting the same day, describing him as the fourth, the two outlets citing slightly different cutoffs. The pattern drew formal attention at the governance level. A May 2024 SEC proxy filing submitted by the New York City Comptroller, urging Tesla shareholders to vote against ratification of Musk’s 2018 pay package, stated plainly that “Musk has begun poaching top engineers from Tesla’s AI and autonomy team for his new company, xAI, including Ethan Knight, who was computer vision chief at Tesla.”

Musk’s thread closed on a single line that would be quoted across the AI industry for the rest of 2024. The same day, Tesla shareholders on Reddit were drawing up a different reading of the moment.

The talent war for AI is the craziest talent war I’ve ever seen!

That line came from Musk’s April 4, 2024 X thread, in a reply to Merritt. On the r/teslainvestorsclub subreddit, one poster asked whether there is a precedent for the CEO of a public company poaching talent for his private company. Another asked if the board of directors were “cool with this,” and a third joked, “Haha, Elon is brain-draining Tesla.”

The Compensation Scale Driving the Frenzy

OpenAI was offering a median salary, including bonus and equity, of $925,000, per Zuhayeer Musa, co-founder of compensation-data platform Levels.fyi, in conversation with the Wall Street Journal, as cited by Quartz. Top offers across the AI sector in early 2024 were reportedly reaching up to $1 million, the same reporting noted. “There is a secular shift in what talents we’re going after,” Naveen Rao, head of Generative AI at Databricks, told the Journal. Rao added: “We have a glut of people on one side and a shortage on the other.”

Beyond the headline figures, the recruiting was running on multiple tracks. OpenAI, Meta, and smaller startups were offering accelerated stock-vesting schedules to poach talent and entire teams, per Quartz. Meta CEO Mark Zuckerberg had written personal emails to Google DeepMind’s AI researchers to recruit them, and by 2025 the offer scale had grown by orders of magnitude. how AI pay packages reached nine figures

Why Tesla’s AI Brain Power Is at Stake

Musk’s “over 200 engineers” line was his way of assuring the market that the Knight departure did not hollow out the team. That number is the entire headcount of Tesla’s AI/Autonomy function that Musk is publicly willing to cite, and it is the team being courted by OpenAI, Meta, and xAI at the same time. The dependence on that headcount has only grown as Tesla’s results have turned, with Musk formally pivoting the company from cars to AI and robots. Tesla’s 46% profit drop and full AI pivot

Tesla’s small shareholders had already raised governance questions about Musk’s parallel use of Tesla staff for his other ventures. The NYC Comptroller’s May 2024 proxy filing urged shareholders to vote against ratification of Musk’s 2018 pay package, citing Musk’s pattern of treating Tesla as a “coffer” for his other businesses.

The same filing noted Musk pledged “significant amounts of Tesla stock as collateral to fund his other pursuits,” a risk to shareholders if forced selling ever followed. The filing also referenced the Delaware court’s January 2024 finding that “Musk operates as if free of Board oversight.” The same report cited Tesla directors’ personal ties to Musk and their outsized stock-option gains, an independence problem the court had flagged when it voided Musk’s 2018 pay package.

• 200+ – engineers in Tesla’s AI/Autonomy team, per Musk (April 2024)
• $925,000 – OpenAI median pay including bonus and equity, per Levels.fyi (April 2024)
• $100,000,000 – Meta signing bonus offers to top OpenAI staff, per CNBC (June 2025)
• 3rd – Tesla engineer Knight was, per The Information’s count, to leave for xAI (April 2024)

Where the AI Talent War Stands Now

By mid-2025, the offers Musk called “craziest” had escalated into another league. Meta was offering signing bonuses as high as $100 million to poach top OpenAI staff for its new superintelligence unit, TBD Lab, per CNBC. The New York Times reported in July 2025 that AI researchers were negotiating total pay packages of $250 million, and unlike professional sports, the major AI companies had no salary caps. The same reporting noted Meta, OpenAI, and Google were competing head-to-head for the same small pool of researchers.

Musk’s own feud with OpenAI ran on a parallel track. He had filed suit against the company he co-founded, accusing Altman of breaching the original founding agreement. An Oakland jury found the suit was filed too late, and the judge adopted the verdict the same day. Musk’s wider feud with OpenAI, which had been part of the public backdrop of the original April 2024 salary debate, kept running on its own track. Musk’s dismissed OpenAI lawsuit and the Bonta MOU

Frequently Asked Questions

Why did Elon Musk raise Tesla engineer salaries in 2024?

Musk said on April 3, 2024, that OpenAI had been “aggressively recruiting Tesla engineers with massive compensation offers and [had] unfortunately been successful in a few cases.” He announced the raise in an X reply to Tesla investor Sawyer Merritt, framing it as a counter to OpenAI’s recruiting.

Is Musk’s xAI also poaching from Tesla?

Yes. The Information reported in April 2024 that Tesla machine-learning scientist Ethan Knight had become the third Tesla engineer to leave the car company for xAI. A May 2024 SEC proxy filing submitted by the NYC Comptroller described Musk as having “begun poaching top engineers from Tesla’s AI and autonomy team for his new company, xAI.”

How much are top AI engineers paid?

In April 2024, Levels.fyi co-founder Zuhayeer Musa told the Wall Street Journal that OpenAI’s median pay (base + bonus + equity) was $925,000, with top offers in the sector reportedly reaching $1 million. By mid-2025, Meta was offering signing bonuses of up to $100 million to recruit top OpenAI staff, and AI researchers were negotiating total packages of $250 million, per The New York Times.

Why is the AI talent war so intense?

Databricks’ head of Generative AI, Naveen Rao, told the Journal: “There is a secular shift in what talents we’re going after. We have a glut of people on one side and a shortage on the other.” Major AI companies do not operate under the salary caps common in professional sports, leaving offers uncapped.

What is the connection to Tesla shareholders?

Tesla shareholders underwrite the salary bump Musk announced in April 2024, while the same xAI venture that benefits from Musk’s talent shuffling is private and not accessible to them. The NYC Comptroller’s May 2024 SEC filing on Tesla flagged this as part of a broader pattern in which “Musk operates as if free of Board oversight,” per Delaware Chancellor Kathaleen McCormick’s January 2024 ruling in Tornetta v. Musk.