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AI Giants Battle for PE Funding Sweeteners
23 Mar
Summary
- OpenAI offers guaranteed minimum 17.5% return to private equity investors.
- Both AI firms seek joint ventures to accelerate enterprise AI adoption.
- Thoma Bravo declined participation due to profit profile concerns.
AI leaders OpenAI and Anthropic are in a race to secure lucrative partnerships with private equity firms, employing a novel strategy within the AI sector. These joint ventures are designed to accelerate the adoption of enterprise AI products by deploying AI tools to a broad base of established companies owned by buyout firms.
OpenAI is reportedly offering a more attractive deal, including a guaranteed minimum return of 17.5% for its private equity partners. This incentive aims to enlist investors for its joint venture, which seeks to deploy engineers and customize AI models for clients.
Anthropic is pursuing a similar strategy to bolster its enterprise offerings, though its current deal with private equity firms reportedly does not include such return guarantees. The joint venture structure could significantly ease upfront costs for both companies as they prepare for potential public listings.
However, the partnerships are not universally appealing. At least two private equity firms, including Thoma Bravo, have declined to participate, questioning the long-term profit profile and economic flexibility of these ventures. Some investors suggest large PE firms already have direct access to these AI companies.
