Engineering Observer Gergely Orosz: AI Startup Executives Leave Due to Overwork
Gergely Orosz revealed that several CTOs and engineering leaders from high-performing AI-native startups have recently resigned due to extreme work intensity. These individuals worked 7 days a week, over 70 hours, and although they held significant equity, the companies were highly valued and investors held substantial liquidation preferences. Some companies previously shared videos of their teams working at 2 AM, and the intensity has not decreased since then. The high-intensity model continues in rapidly growing AI startups, directly driving the loss of core technical management. The funding structure favors protecting early investors, benefiting VC firms with preferred rights, while executives holding shares face pressure as they struggle to realize their equity.
ABAB AI Insight
Gergely Orosz has long tracked engineering culture and has previously documented the disparity in working hours and equity realization between Big Tech and startups, including cases where early Uber and some Silicon Valley unicorns experienced a mass exodus of mid-level engineering managers due to a sustained 996 work rhythm. AI-native startups generally adopt a high valuation + preferred stock structure for financing, rapidly inflating book valuations with early funds while locking in minimum returns for investors through liquidation preferences, significantly compressing the actual equity realization paths for core executives. Resources continue to tilt towards product iteration and computing power procurement to maintain growth narratives. Similar paths were seen during WeWork's rapid expansion and at the peak of certain crypto projects. Currently, AI startups are still in an expansion-driven phase and have not yet entered control or transformation; engineering management is the first group to reach the sustainable boundary. Essentially, this represents a risk transfer under capital concentration: high valuation financing provides downside protection to preferred shareholders, while upside expectations and overwork costs fall on common equity and management, with the mechanism locking in financing structures ahead of organizational sustainability. ABAB News · Cognitive Laws 1. High valuation equity ≠ realizable wealth 2. Preferred rights protect capital, overwork depletes management 3. Growth narratives can obscure structure, but cannot cover up sleep.