OpenAI commits $1.5 billion to DeployCo joint venture, guarantees 17.5% return to PE firms

OpenAI in talks to commit up to $1.5 billion to private equity joint venture, FT reports

April 22 (Reuters) - Artificial intelligence firm OpenAI is set to commit up to $1.5 billion to a new joint venture with private equity firms, the Financial ⁠Times reported on Wednesday, citing people with knowledge of the matter. Reuters could not immediately verify the report. OpenAI will commit an initial $500 million of ⁠its equity into the joint venture - internally named 'DeployCo'- which will be ⁠valued at $10 billion as part of a funding ⁠round expected to close in early May, ⁠FT added. Reporting by Ananya Palyekar in Bengaluru; Editing by Sonia Cheema Our Standards: The Thomson Reuters Trust Principles., opens new tab

OpenAI to commit up to $1.5B of its own capital to DeployCo

The FT reports that OpenAI's $500M initial equity stake, with an option for $1B more, will go into a Delaware LLC designed to accelerate AI adoption across PE portfolio companies. OpenAI is guaranteeing backers a 17.5% annual return. A close is expected in early May. OpenAI is set to commit up to $1.5 billion of its own capital to a new joint venture with private equity firms, the Financial Times has reported, in the latest development in what has become a structured enterprise distribution race with rival Anthropic. The joint venture, known internally as DeployCo, is a Delaware-registered LLC designed to speed up the adoption of OpenAI's workplace tools across the portfolio companies of its PE investors. OpenAI will hold super-voting shares. The venture is expected to be valued at $10 billion in a funding round set to close in early May. OpenAI's initial equity commitment is $500 million, with an option to add a further $1 billion at a later stage. PE firms investing in the venture include TPG, Bain Capital, Advent International, Brookfield, and Goanna Capital, are collectively committing approximately $4 billion. DeployCo's backers will invest for five years, with OpenAI guaranteeing them an annual return of 17.5%. The guarantee is a structural feature designed to de-risk the investment for PE firms: it functions as a floor return on preferred equity, meaning OpenAI absorbs the shortfall if the venture underperforms. The strategic logic is distribution rather than capital. OpenAI raised $110 billion at a $730 billion pre-money valuation in February and is not raising DeployCo to fund operations. The purpose of the joint venture is to convert the PE firms' combined portfolio universe, hundreds of operating companies across healthcare, logistics, manufacturing, and financial services, into a captive channel for OpenAI's enterprise products, bypassing the slower deal-by-deal sales cycle. TPG alone controls stakes in companies employing hundreds of thousands of people. A JV relationship converts the PE firms from passive observers into active distribution partners who have a financial incentive to push OpenAI products into their portfolios. The 17.5% guaranteed return is the most revealing detail in the deal. OpenAI is projecting a loss of approximately $14 billion in 2026 even as it approaches $30 billion in annualised revenue. Guaranteeing a 17.5% floor on $4 billion of PE capital represents up to $700 million in annual guaranteed exposure if the JV underperforms. That is a significant financial commitment for a company still losing money at scale, and it signals how urgently OpenAI views the enterprise market. Anthropic is pursuing a parallel joint venture with Blackstone, Hellman & Friedman, and Permira at a smaller scale, approximately $1 billion, and without a guaranteed return floor, according to prior reporting by Reuters and The Information.

OpenAI in talks to commit up to $1.5 billion to private equity joint venture: FT - The Economic Times

Artificial intelligence firm OpenAI is reportedly planning to invest up to $1.5 billion in a new joint venture, internally named 'DeployCo'. This venture, with private equity firms, is expected to be valued at $10 billion.Artificial intelligence firm OpenAI is set to commit up to $1.5 billion to a new ⁠joint ⁠venture with private equity firms, the Financial Times reported on Wednesday, citing people with knowledge ⁠of the matter. Reuters could not immediately ⁠verify the report. OpenAI will commit an initial $500 million of its equity into the joint venture - internally named 'DeployCo'- which will be valued at $10 billion as part ⁠of a funding round expected to close in early May, FT added.

OpenAI Pledges $1.5 Billion to PE Enterprise AI Project | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. That's according to a report Wednesday (April 22) from the Financial Times (FT), which characterizes the move as part of the startup's plan to overtake chief competitor Anthropic in the race to sell artificial intelligence (AI) tools to businesses. Sources with knowledge of the matter told the FT that OpenAI will contribute an initial $500 million in its equity into the joint venture, with the option to add another $1 billion later. The venture will be valued at $10 billion as part of a funding round expected to close early next month, the sources said. OpenAI's PE plans had been reported by Reuters in March. Additional reporting said the company has reassigned its chief operating officer to oversee the project. Investors such as TPG, Bain Capital, Advent International, Brookfield and Goanna Capital will invest an additional $4 billion, sources told the FT. The private equity backers will invest for five years, and OpenAI has promised them an annual 17.5% return. "That is a floor . . . but we expect it to be much higher," said a person with knowledge of the plans. The new venture "generates revenue by being the best in the world at AI deployment, at rewiring businesses. If we're very early in this cycle [of AI adoption], then that's a very valuable asset," that source said. The FT had reported earlier this month that Anthropic was gaining on OpenAI as more businesses adopt its tools. The report cited figures from payments company Ramp showing Anthropic increasing its share of enterprise customers, while OpenAI's business adoption levels were flat. OpenAI has disputed the FT's findings. The news follows a recent Wall Street Journal (WSJ) report saying OpenAI was working with consulting firms to sell companies on its coding product. "Helping companies bridge that gap between how to use it, how to expand it and how to move even more quickly is part of our responsibility, and these partnerships are going to allow us to help scale that to the world," OpenAI Chief Revenue Officer Denise Dresser told the WSJ. As covered here previously, Anthriopic is also in discussions about its own joint venture that would see it sell its AI tools to the private equity firms' clients. "Anthropic has been repositioning Claude from a conversational assistant into a tool embedded in enterprise operations," PYMNTS wrote last month, in reference to the startup's flagship AI product. As covered here, the company is expanding Claude beyond chat "into structured enterprise workflows, integrating the model into coding, document analysis and business process automation."

OpenAI in talks to invest up to $1.5 bln in PE-backed joint venture, FT reports By Investing.com

Investing.com-- OpenAI is in talks to commit up to $1.5 billion to a new private-equity-backed joint venture aimed at accelerating the adoption of artificial intelligence tools across businesses, the Financial Times reported on Wednesday. The company plans to invest an initial $500 million of equity into the venture, which could be valued at about $10 billion in a funding round expected to close in early May, the report sais, cting people familiar with the matter. OpenAI also has the option to invest a further $1 billion at a later stage, it added. Get real-time updates on market-moving news with InvestingPro Investors, including TPG (NASDAQ:TPG), Bain Capital, and Advent International, are expected to contribute roughly $4 billion, the report said. The venture, internally dubbed "DeployCo", will focus on embedding AI tools within portfolio companies owned by private equity firms, generating revenue by helping businesses integrate and deploy the technology more effectively, the FT reported.

OpenAI in talks to commit up to $1.5 billion to private equity joint venture, FT reports

April 22 (Reuters) - Artificial intelligence firm OpenAI is set to commit up to $1.5 billion to a new joint venture with private equity firms, the Financial Times reported on Wednesday, citing people with knowledge of the matter. Reuters could not immediately verify the report. OpenAI will commit an initial $500 million of its equity into the joint venture - internally named 'DeployCo'- which will be valued at $10 billion as part of a funding round expected to close in early May, FT added. (Reporting by Ananya Palyekar in Bengaluru; Editing by Sonia Cheema)