OpenAI plans to invest up to $1.5 billion of its own funds into DeployCo.
The Financial Times has reported that OpenAI's initial equity investment of $500 million, with an option for an additional $1 billion, will be allocated to a Delaware LLC aimed at facilitating AI adoption among private equity portfolio companies. OpenAI is offering its investors a guaranteed annual return of 17.5%, with a deal closure anticipated for early May.
OpenAI is poised to invest up to $1.5 billion of its own funds in a new joint venture with private equity firms, marking the latest move in a competitive landscape against rival Anthropic. Known internally as DeployCo, this Delaware-registered LLC is intended to accelerate the use of OpenAI's workplace tools within the portfolio companies of its private equity backers. OpenAI will retain super-voting shares in the venture.
The upcoming funding round for this joint venture is expected to value it at $10 billion, with OpenAI's initial equity stake set at $500 million and the potential to add another $1 billion later. The participating private equity firms, including TPG, Bain Capital, Advent International, Brookfield, and Goanna Capital, are collectively investing around $4 billion.
The backers of DeployCo will contribute funds over five years, with OpenAI guaranteeing them a 17.5% annual return. This guarantee is structured to reduce risk for the private equity firms, acting as a minimum return on preferred equity, meaning OpenAI will cover any losses should the venture not meet expectations.
The strategy centers on distribution rather than capital. In February, OpenAI raised $110 billion at a $730 billion pre-money valuation and is not seeking funding for DeployCo to support its operations. The goal of this joint venture is to transform the combined portfolio of the private equity firms—spanning hundreds of companies in sectors like healthcare, logistics, manufacturing, and financial services—into a dedicated channel for OpenAI's enterprise products, thereby avoiding the slower traditional sales approach.
TPG alone has stakes in numerous companies employing hundreds of thousands of people. This joint venture shifts the private equity firms from passive observers to active distribution allies, incentivized to promote OpenAI's products within their portfolios.
The guaranteed 17.5% return is a significant aspect of the deal. OpenAI anticipates a loss of around $14 billion in 2026, despite nearing $30 billion in annual revenue. By guaranteeing a 17.5% return on $4 billion of private equity investment, OpenAI could face up to $700 million in annual guaranteed exposure if the joint venture fails to perform.
This represents a substantial financial obligation for a company that is still operating at a loss, indicating the urgency OpenAI feels regarding the enterprise market. Anthropic is reportedly working on a similar joint venture with Blackstone, Hellman & Friedman, and Permira, but at a smaller scale of about $1 billion and without a guaranteed return, as previously reported by Reuters and The Information.
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