Leaked Microsoft salary data shows the pay gap between Microsoft AI and the rest of the company
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Happy Friday! Got any shows you're looking to binge this weekend? Sometime soon you might be tuning into Chick-fil-A TV. It might sound funny, but brands launching their own shows could be the future.
In today's big story, an unofficial doc looks at pay packages across Microsoft, including the one group getting rewarded handsomely.
What's on deck:
- Markets: Jamie Dimon could find himself in Washington regardless of who wins in November.
- Tech: AI will be a lot less profitable than previous tech waves.
- Business: Sports betting is tanking some Americans' finances.
But first, AI pays.
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The big story
Making money at Microsoft
Microsoft; Getty Images; Chelsea Jia Feng/BI
How much money do you make?
It's an uncomfortable question for many, but some workers embrace pay transparency to understand how their salaries compare to their colleagues'.
That's the case at Microsoft, where hundreds of employees voluntarily share details of their pay and promotions via an unofficial spreadsheet, writes Business Insider's Ashley Stewart.
The doc includes more than 500 submissions from people who identified themselves as Microsoft employees in the US. Ashley broke down the numbers to calculate Microsoft software engineers' average total comp, base pay, cash bonus/stock awards, and raise/bonus percentages for this year across multiple levels.
Such an expansive view of a tech giant's salary ranges is always fascinating. But Microsoft's comp data is particularly interesting considering its tumultuous recent history around pay.
In 2022, Microsoft raised compensation via stock grants and salary increases for all but its most senior employees. The move came in response to a growing number of its workers feeling underpaid compared to Microsoft's tech peers like Amazon.
The pay boon was short-lived, though. Last year Microsoft initiated a salary freeze and reduced its bonus and stock award budget. But this year the company restarted performance-based raises.
Drew Angerer/Getty Images; Chelsea Jia Feng/BI
Microsoft comp data is another example of how big the company is betting on AI.
The average total comp for software engineers in the new Microsoft AI org — $377,611 — was at least $120,000 higher than the averages in Microsoft's other orgs (Azure, Cloud and AI, Experiences and Devices.)
The group was formed in March as a way to supercharge Microsoft's consumer-AI strategy, which includes its Copilot AI chatbot and Bing search engine. Mustafa Suleyman, a DeepMind cofounder, runs the team.
As a reminder, this pay data is based on Microsoft employees' self-reporting, so it's not a complete picture. However, the pay gap between Microsoft AI and the rest of the company is undeniable.
On the one hand, it's understandable why Microsoft would shell out big for AI talent. The company clearly believes it's the future of the industry, and they're not alone. So many deep-pocketed tech firms chasing after a small pool of AI talent is bound to drive the price up.
But that doesn't make it an easier pitch to the other employees. While they work on the products keeping the lights on at Microsoft, their colleagues get paid significantly more to focus on stuff with a questionable path to profitability.
News brief
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3 things in markets
Bloomberg Creative/Getty, Drew Angerer/Getty, Tyler Le/BI
- What's it gonna be, Jerome? Everyone is watching Fed Chair Jerome Powell's speech this morning hoping to get clues on September's rate cut. Here's what to watch out for. Meanwhile, a Goldman Sachs' economist said the speech could come with some surprises for the market.
- Jamie Dimon's Wall Street-to-Washington path has legs. The JPMorgan CEO's name has reportedly been discussed by both candidates as an option for Treasury Secretary. This month Dimon reiterated he was happy with his job, but this year he also alluded to an impending retirement.
- "I see fortune in the stock market's future." The stock market flashed a positive sign that suggests double-digit gains are in store over the next year, according to a note by Ned Davis Research. Since July, three promising signals have appeared, indicating strong market recovery.
3 things in tech
Justin Sullivan/Getty Images;Chelsea Jia Feng/BI
- AI won't be the cash cow of previous tech waves. Big Tech companies are spending a whopping $1 trillion on artificial intelligence. The lingering question has been about what the returns will look like — and an early answer doesn't look promising. RBC Capital Markets found Gen AI will make software profit margins "structurally" lower.
- These are the 100 most-used AI apps, according to a top VC. Andreessen Horowitz just released its third installment of Top 100 Gen AI Consumer Apps, which rounds up the most-used apps in the space. Creative tools are particularly popular, with many of the apps generating songs, images, and more. See which apps are rising through the ranks.
- Engineers are bootstrapping their way to smarter AI models. As they wait for the release of ChatGPT-5, some developers are finding ways to improve AI outputs without an entirely new model. Layering AI models can be more costly, but the marked improvement may be worth it for some problems.
3 things in business
Getty Images; Jenny Chang-Rodriguez/BI
- Sports betting has become a terrible deal for Americans' finances. Two new studies found that sports betting is seriously hurting Americans' financial health, especially the finances of young men. According to the surveys, gambling is tied to lower credit scores and less investing in assets like stocks.
- Jack of all trades, employed by none. Instead of being a generalist, having niche work experience might help you land a job. That's because as hiring slows, companies are looking for workers with specific expertise.
- Fast food innovates to solve its Gen Z problem. Chains are trying a variety of quirky new tactics to reach Gen Z consumers, the least likely age group to see fast food as a good deal. Chick-fil-A is betting on efficiency; it just opened a two-story drive-thru-only restaurant with four dedicated lanes.
In other news
- The Midwest is having a moment.
- I worked in Big Law for 4 years but felt like I was sacrificing my morals. I took a 75% pay cut but love my work now.
- OpenAI joins Silicon Valley companies lobbying against California's AI bill, which includes a 'kill switch.'
- Shein found two cases of child labor at its suppliers last year.
- China's version of UberEats says it now delivers snacks to the Great Wall for 56 cents using drones
- 8 buy-rated stocks set to take off from red-hot AI data center demand as Big Tech shells out billions.
- Ready to feel old? Instagram's new feature is a Myspace throwback.
- Goodbye backpacks. The cool kids are going back to school with a $155 Longchamp tote in hand.
What's happening today
- Jerome Powell speaks at Jackson Hole Economic Policy Symposium.
- Sabrina Carpenter releases new album, "Short n' Sweet."
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. Milan Sehmbi, fellow, in London. Amanda Yen, fellow, in New York.