OpenAI Offers Huge Returns to Private Equity to Beat Anthropic

The makers of ChatGPT are trying to win over major investment firms with a very tempting offer. OpenAI is reportedly promising a guaranteed return of 17.5 percent to private equity groups that agree to partner up. This move is part of a growing battle against their main rival, Anthropic.

According to Reuters, both artificial intelligence companies want these investors to help push their tech into hundreds of established businesses.

OpenAI and Anthropic want to create joint ventures with big firms

OpenAI and Anthropic are currently fighting for the exact same goal. They want to create joint ventures with big buyout firms like TPG and Advent. If a private equity firm signs on, it will encourage all the different companies it owns to use that specific software.

This is a massive shortcut for the AI creators. Instead of selling to one company at a time, they get access to an entire portfolio of businesses at once. Getting these companies locked into their system now guarantees steady money later.

Both OpenAI and Anthropic are pushing hard for these deals as they prepare to take their companies public later this year.

The AI companies want to share the massive cost of setting up AI with equity firms

Bringing artificial intelligence into a large company is not cheap or easy. It requires a lot of highly paid engineers to customize the software for each specific client. By forming these joint partnerships, OpenAI and Anthropic can share those heavy setup costs with the investment firms. This makes their own financial books look much better right before they ask everyday investors to buy their stock.

To make sure they win the most partners, OpenAI is sweetening the pot. Along with that 17.5 percent minimum return, they are also giving these firms early access to their newest AI models. Sources say Anthropic has not offered the same financial guarantees.

Even with the big promises, some investment groups are passing on the offer. Thoma Bravo is one of the largest software buyout firms in the world, and they recently decided to walk away from talks with both AI companies. It had doubts about how profitable these joint ventures would actually be in the long run. 

It also noted that many of the businesses they own are already figuring out how to use AI on their own without needing a special partnership.