Silicon Valley’s startup culture has long sold itself on alluring perks: cold brew on tap, nap pods tucked between standing desks, and even free slippers for their “no-shoes” offices. The pitch was simple: work hard, but live well while building the next big thing.

But as the race for top AI talent accelerates, startups are increasingly leaning on a far more direct incentive: eye-popping paychecks.

Software engineers at venture-backed startups are receiving median base-salary offers of $200,000—a 25% increase from 2022—according to Levels.fyi. In some cases, newly-minted computer science graduates are fielding offers upward of $300,000 annually, sky-high wages once reserved for seasoned engineers at Big Tech giants, said Chris Vasquez, CEO of startup recruiting firm Quantum.

“Prior to this, I’d probably never seen anyone over $300,000 on base salaries at seed companies,” Vasquez recently told The Wall Street Journal. Now, “They’re able to take home FAANG [Facebook, Amazon, Apple, Netflix, Google]-level cash comp.”

AI itself is helping fuel the frenzy. New tools are making it easier and faster than ever to build and scale companies, lowering the barrier to entry for budding professionals and intensifying competition for a small pool of elite talent.

At least in the short term, that’s good news for young engineers entering the workforce—despite broader concerns that AI could eventually significantly shrink the number of traditional tech roles. If salaries alone are any indication, demand for the best of the best talent has never been higher.

The battle for AI talent is raging —so companies are dishing out 7-figure paychecks

After the world’s best AI talent spends a few years fine-tuning their skills, their compensation could even stretch into the seven figures. And as industry insiders note, financial equity can be an even bigger draw than base salary for companies with sky-high ambitions.

Employee stock grants alone can range from $2 million to $4 million at a Series D startup, according to Tim Tully, a partner at venture capital firm Menlo Ventures.

“That was unfathomable when I was hiring research scientists four years ago,” Tully, told Fortune last year, noting that those working on foundational AI and theoretical breakthroughs hold the golden tickets to top-tier companies.

At Big Tech companies, the offers are even more eye-watering as firms pour billions into AI, igniting a nonstop tug-of-war for talent among companies like OpenAI, Meta, Google, Microsoft, and Anthropic.

The most intense battle centers over a small pool of fewer than 1,000 AI research scientists who can build today’s most advanced large language models. OpenAI CEO Sam Altman even said last year that the competition intensified to the point where Meta offered signing bonuses as high as $100 million to lure top talent. The ChatGPT-maker’s average stock-based compensation hit a whopping $1.5 million among its roughly 4,000 employees in 2025—the highest of any tech startup in history—the WSJ reported.

Even with sky-high salary promises, uncertainty clouds the AI job market

The boom comes with a familiar caveat: the odds of survival remain slim.

For every success story that begins in a garage or dorm room, countless companies stall out—even after making a name for themselves.

Moreover, not every tech worker is cashing in at the top of the market. While a select group of candidates can command eye-popping offers, most new graduates are still landing more modest—but still sizable—paydays.

The average starting salary for computer science majors is expected to be around $81,500 for the class of 2026, according to the National Association of Colleges and Employers, up 7% from the previous year.

Taken all together, the numbers point to a job market defined by opportunity and imbalance: companies are paying a premium for the very best talent, even as layoffs remain omnipresent and the future demand for tech workers remains uncertain.