ByteDance is offering special stock options to employees of its Seed AI division at $13 per share to fend off poaching from rivals like Tencent. This marks the first time the Beijing-based company has issued shares tied to a specific business unit, giving staff exposure to Seed's growth without dilution from other operations.

The move comes as China's tech talent war intensifies, particularly for AI specialists. Tencent has intensified hiring efforts targeting ByteDance staff after conceding it fell behind competitors in large language models. Recent departures include Xiao Xuefeng and Zhang Chi, both senior researchers who left for Tencent.

The compensation structure is controversial as it may create internal divisions and discourage collaboration. Despite building one of China's largest AI operations, ByteDance's organization has become overly bureaucratic according to insiders, while rivals offer researchers greater project scope and decision-making authority.