OpenAI in Advanced Talks with Private Equity Firms for Joint Venture

Overview

OpenAI is in advanced discussions with private equity firms, including TPG, Advent International, Bain Capital, and Brookfield Asset Management, to form a joint venture that would distribute its enterprise products across the firms' portfolio companies and beyond.

Proposed Deal

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The proposed deal has a pre-money valuation of approximately $10 billion and could give OpenAI a faster route into corporate adoption while providing the PE firms with a potential lifeline for companies in their portfolios that are exposed to AI disruption. Under the proposed arrangement, the private equity investors would commit approximately $4 billion and receive equity stakes in the venture, along with influence over how OpenAI's technology is deployed across their portfolio companies.

Participating Firms

TPG would serve as the anchor investor, committing the most capital, while Advent, Bain, and Brookfield would participate as co-founding investors. All four firms would secure board seats in the joint venture.

Alternative Arrangement

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Anthropic is also in discussions with private equity firms, including Blackstone, Permira, and Hellman & Friedman, to form a joint venture that would sell its Claude AI technology to companies backed by those firms. The PE firms would take an equity stake of approximately $1 billion.

AI Market Dynamics

The rapid advance of AI has rattled valuations across the software sector, made it harder for buyout firms to underwrite deals with confidence, and raised uncomfortable questions about the long-term viability of business models that automation could render obsolete. In the enterprise AI market, Anthropic is widely seen as ahead of OpenAI, with stronger adoption among corporate clients.

OpenAI's Enterprise Business

As of the end of last month, OpenAI's enterprise business generated $10 billion out of a total annualized revenue of $25 billion. The deal could also help distribute OpenAI's enterprise offering, Frontier, which was launched last month.