The artificial intelligence boom is creating a new phenomenon in Silicon Valley: ‘golden handcuffs’ that are keeping employees locked into their positions at AI chipmaker companies like Nvidia, Broadcom, and AMD. As these companies’ stock prices have skyrocketed—Nvidia is up more than 1,100% over the past few years to become a $4.5 trillion company—employees are finding themselves in an enviable yet complicated position.
The challenge stems from restricted stock units (RSUs), a common form of compensation in tech companies. These equity packages have ballooned in value alongside the AI boom, creating substantial wealth for employees but also making it financially risky to leave. According to data from Levels.fyi, an equity package of $420,000 given to an Nvidia employee in 2023 is now worth almost $2 million. Even more modest packages have seen dramatic appreciation—a $66,000 RSU package at Broadcom from 2023 has jumped to around $267,000.
The catch is that these stock payouts unlock over time, and quitting before shares vest means forfeiting potentially millions of dollars. This creates a retention mechanism that companies are actively leveraging. Nvidia CEO Jensen Huang has boasted about making employees wealthy, and the company’s annual sustainability report reveals that its turnover rate has been cut in half over recent years, with RSUs cited as promoting retention.
The numbers support this strategy’s effectiveness. Nvidia stated that ‘RSUs promote retention’ in its sustainability report, while Broadcom reported a global voluntary attrition rate of just 6.2% last year, which is below the technology industry benchmark. The company explicitly cited equity awards as a ‘powerful long-term retention incentive.’
This presents a significant conundrum for chipmaker employees in the AI era: should they walk away from millions in unvested stock for new opportunities, or stay put? The golden handcuffs phenomenon represents a modern twist on employee retention tactics that have been utilized from Wall Street to Big Tech, but the AI boom has amplified the stakes dramatically. As AI continues to drive unprecedented growth in the semiconductor industry, this compensation dynamic is likely to intensify, potentially reshaping talent mobility across the tech sector.
Key Quotes
RSUs promote retention
Nvidia stated this in its annual sustainability report, explaining how the company has successfully cut its employee turnover rate in half over recent years by using restricted stock units as a retention tool during the AI boom.
powerful long-term retention incentive
Broadcom described equity awards this way when reporting its voluntary attrition rate of 6.2%, which is below the technology industry benchmark, demonstrating how AI chipmakers are successfully using stock compensation to keep talent.
Our Take
The golden handcuffs phenomenon represents a fascinating paradox in the AI economy: employees are simultaneously winners and prisoners of the boom. While creating substantial wealth, these retention mechanisms could have unintended consequences for the AI ecosystem. Historically, Silicon Valley’s innovation has thrived on talent mobility—engineers moving between companies, starting new ventures, and cross-pollinating ideas. If the financial stakes of staying become too high, we may see reduced entrepreneurship and slower innovation diffusion. Additionally, this dynamic could create a two-tier system within tech: those fortunate enough to join AI chipmakers early versus everyone else. The article also hints at a broader trend where AI companies are essentially buying loyalty in an era when workplace loyalty is otherwise declining. This raises questions about whether retention driven purely by financial incentives creates the same innovative culture as retention driven by mission and engagement.
Why This Matters
This story reveals a critical dynamic in the AI talent wars that will shape the industry’s future. As AI companies compete for scarce technical talent, compensation strategies are evolving beyond traditional salary structures to create powerful retention mechanisms. The golden handcuffs phenomenon has significant implications for innovation and competition in the AI sector—if top talent becomes locked into existing companies, it could slow the formation of new AI startups and limit talent mobility that typically drives innovation.
For the broader economy, this trend highlights how AI is creating unprecedented wealth concentration among employees at a select group of companies. The fact that modest equity packages are turning into life-changing sums demonstrates the transformative economic impact of the AI boom. However, it also raises questions about workforce flexibility and career development. When financial incentives become so powerful that they override career aspirations, it could lead to employee dissatisfaction despite wealth accumulation. This dynamic may also widen inequality between workers at AI-boom companies versus those in other sectors, potentially affecting talent distribution across the entire tech industry and beyond.
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Source: https://www.businessinsider.com/ai-boom-employee-pay-restricting-golden-handcuffs-big-tech-2025-10