OpenAI to commit up to $1.5B of its own capital to DeployCo

"OpenAI's initial equity commitment is $500 million, with an option to add a further $1 billion at a later stage. The venture is expected to be valued at $10 billion in a funding round set to close in early May."

"The purpose of the joint venture is to convert the PE firms' combined portfolio universe, hundreds of operating companies across healthcare, logistics, manufacturing, and financial services, into a captive channel for OpenAI's enterprise products."

"OpenAI is guaranteeing backers a 17.5% annual return. The guarantee is a structural feature designed to de-risk the investment for PE firms: it functions as a floor return on preferred equity."

OpenAI is establishing a joint venture called DeployCo, with an initial equity stake of $500 million and an option for an additional $1 billion. This Delaware LLC aims to enhance the adoption of OpenAI's tools across private equity portfolio companies. Backers, including major PE firms, are committing around $4 billion, with OpenAI guaranteeing a 17.5% annual return to de-risk investments. The venture is valued at $10 billion and focuses on distribution rather than capital, converting portfolio companies into channels for OpenAI's enterprise products.

Read at TNW | Business