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OpenAI Enhances Private Equity Offer Amid Enterprise AI Competition

  • 2 hours ago
  • 3 min read

OpenAI is offering private-equity firms a more appealing deal than its rival Anthropic, as both artificial intelligence organisations seek joint ventures. These partnerships aim to raise fresh capital and accelerate the adoption of enterprise AI products.



OpenAI is proposing preferred equity stakes with a guaranteed minimum return of 17.5%. This return is significantly higher than typical preferred instruments, according to sources familiar with the matter. The organisation is also offering early access to its newest AI models.


It is attempting to enlist investors such as TPG and Advent for its joint venture. OpenAI has recently focused more on enterprise, an area where Anthropic has historically held a stronger position. By contrast, Anthropic’s enterprise-focused private-equity deal offered no such returns.


OpenAI and Anthropic are vying for partnerships with buyout firms. These collaborations would enable them to rapidly deploy AI tools to potentially hundreds of private, established companies owned by these firms. This approach would boost model adoption and encourage customer loyalty.


The two organisations are competing for lucrative business customers as they race to position themselves for potential public listings. Such listings could occur as early as this year.


The joint venture structure could absorb high upfront costs linked to deploying engineers who customise models for clients. This would ease cost pressures on OpenAI and Anthropic before going public. It would also provide clearer segment reporting to support an initial public offering narrative.


OpenAI and Anthropic are rapidly securing similar types of partnerships with private-equity firms, a new strategy within the AI sector. Matt Kropp, from Boston Consulting Group’s AI unit, noted a significant race to secure as much enterprise business as possible. Kropp added that a customised AI model, once integrated, makes switching to a competitor much more difficult, indicating immense scalability.


Not all private-equity firms have decided to participate in these joint ventures. At least two firms declined, citing concerns regarding the economics, flexibility, and profit profile of the partnerships.


Thoma Bravo, one of the world’s largest software-focused buyout firms, chose not to participate after internal discussions. Managing Partner Orlando Bravo questioned the long-term profit profile of joint ventures with OpenAI and Anthropic. Bravo noted that many of Thoma Bravo’s portfolio companies are already deploying AI tools.


OpenAI, TPG, and Advent declined to comment. Anthropic did not respond to a request for comment, and Thoma Bravo also declined to comment.


Some private-equity investors also questioned these partnerships, arguing that large firms already have direct access to OpenAI and Anthropic without committing capital. These investors suggested the partnerships reflect pressure on buyout firms from their own investors to demonstrate a clearer AI strategy.


They noted that with technology valuations down, these ventures may not materially change access to AI tools or generate additional revenue. Any meaningful upside, they added, would likely depend on securing board seats, equity stakes, or other economic terms available only to lead partners.


Other private-equity firms are in talks with OpenAI and Anthropic about participating. Many are expected to take smaller stakes without board seats or lead roles.


The investment also includes seniority over other joint venture partners and downside protection. More private-equity firms are discussing investing smaller amounts in the joint venture.


OpenAI expects its joint venture to become profitable, supported by strong demand for its AI tools and the engineers who deploy them. The partnership will generate revenue by charging for implementation services, taking a share of revenue from developed and deployed products, and co-owning newly created products.


OpenAI is in advanced discussions with firms including TPG, Bain Capital, Advent International, and Brookfield Asset Management. The organisation aims to raise about USD 4 billion at a pre-money valuation of roughly USD 10 billion.


Anthropic is pursuing a similar strategy and has been courting private-equity firms for its own enterprise-focused venture. These firms include Blackstone, Hellman & Friedman, and Permira.


  • OpenAI is offering private-equity firms a guaranteed minimum return of 17.5% on preferred equity stakes for enterprise AI joint ventures.

  • This offer is more appealing than rival Anthropic’s deal, which provided no such returns, as both companies compete for business customers.

  • The joint ventures aim to raise capital, accelerate enterprise AI product adoption, and ease costs before potential public listings.



Source: REUTERS

 
 
 

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