OpenAI has pledged to invest up to $1.5 billion in a new joint venture with private equity firms, expected to launch at a $10 billion valuation in a funding round set to close in early May. The move comes as the firm steps up efforts to outpace its strongest rival, Anthropic, in the rapidly growing AI enterprise market.
Claim 30% Off TipRanks
New trading tool for NVDA bears
OpenAI Attracts Major Equity Support for New Venture
OpenAI will reportedly contribute an initial $500 million in equity to the new joint venture, DeployCo. The private company will also have the option to invest an additional $1 billion over time, according to people familiar with the matter. Simultaneously, private equity firms including TPG (TPG), Bain Capital, Advent International, Brookfield (BN), and Goanna Capital will contribute about $4 billion.
These private equity supporters are expected to lock in capital for five years and earn a minimum annual return of 17.5%, described as a “floor” with potential upside beyond that level. Under this structure, OpenAI maintains majority ownership and enhanced voting rights, while the guaranteed return is said to reduce risk for investors participating in the deal.
DeployCo Strengthens OpenAI’s Rivalry with Anthropic
DeployCo is designed to speed up the adoption of OpenAI’s tools in workplaces and to play a central role in its push into the enterprise market. The venture has begun hiring its own staff while also bringing in secondaries from OpenAI.
DeployCo will also charge clients, mainly portfolio companies of its private equity backers, to integrate AI into their businesses. Furthermore, the venture uses a “forward-deployed engineers” model similar to Palantir’s (PLTR), where technical staff work directly within client firms to support deployment.
According to sources, DeployCo will help OpenAI compete more directly and firmly with Anthropic, which has recorded strong revenue growth from its Claude AI products. To support this effort, OpenAI is also working with consulting firms, including McKinsey & Company and Accenture (ACN).
In addition, OpenAI may use its equity position to pursue future acquisitions of technology and intellectual property. Meanwhile, Anthropic is reportedly exploring a similar private equity partnership with firms including Blackstone Group (BX) and Hellman & Friedman.
What Are the Best AI Stocks to Buy?
Investors seeking exposure to AI stocks can look at publicly traded alternatives such as Nvidia (NVDA), Micron (MU), Microsoft (MSFT), Alphabet (GOOGL), and Meta Platforms (META). According to Wall Street analysts tracked in the TipRanks Stocks Comparison Center, these stocks are Strong Buys, with each carrying notable upside potential and price targets.
