OpenAI plans to invest $1.5B in DeployCo: What is it?
What's the story
OpenAI, the company behind ChatGPT, is planning to invest up to $1.5 billion in a new joint venture with private equity firms. The Financial Times reported this, citing sources familiar with the matter. The initial investment will be an equity of $500 million into a venture called DeployCo, which is tipped to be valued at $10 billion in a funding round closing in early May.
Venture details
DeployCo aims to accelerate adoption of OpenAI's workplace tools
DeployCo, a Delaware-listed LLC, is reportedly aimed at accelerating the adoption of OpenAI's workplace tools. The venture is a key part of the company's strategy to enter the enterprise market. As part of this arrangement, OpenAI will hold super-voting shares in DeployCo. The private equity backers for DeployCo are expected to invest over five years with an annual return guarantee of 17.5% from OpenAI.
Investment potential
Investors looking to invest another $4B in DeployCo
The FT report also suggests that OpenAI could invest an additional $1 billion later on. This comes as investors such as TPG, Bain Capital, Advent International, Brookfield, and Goanna Capital are looking to invest another $4 billion in DeployCo. Notably, both OpenAI and its rival Anthropic have been aggressively courting private equity firms which control many enterprise companies and influence corporate spending on software and AI.