OpenAI talks to invest up to $1.5bn in private equity joint venture

In short: OpenAI is in talks to commit up to $1.5bn to a new joint venture with private equity firms to help more businesses adopt its AI tools.

What happened

OpenAI is discussing a deal to back a new company, described internally as “DeployCo,” according to people familiar with the talks. The goal is to help businesses owned by private equity firms use OpenAI’s products at work.

The plan would start with OpenAI putting $500mn of its own equity into the venture. OpenAI would also have the option to add another $1bn later, bringing its total commitment up to $1.5bn. The joint venture is expected to be valued at $10bn as part of a funding round that could close in early May.

Several investment firms are expected to put in additional money, totaling about $4bn, including TPG, Bain Capital, Advent International, Brookfield, and Goanna Capital, the Financial Times reported. The venture would charge client companies to “embed” AI into their operations, meaning it would help set up AI tools inside day to day work systems, like adding a new machine to a factory line.

DeployCo is set up as a Delaware-listed LLC, and is currently managed by Brad Lightcap, an OpenAI executive. The company is also hiring “forward deployed engineers,” which are software specialists who work inside a customer’s business to help get the tools running.

Why it matters

Many companies say the hard part is not buying AI, but getting it working safely and usefully in real workflows. This venture could speed that up, and it shows how AI companies are competing to become the default choice for large businesses.

Source: Financial Times