Private equity is partnering with Big AI
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If you can't beat 'em, join 'em.
- That's the emerging consensus among private equity firms, which are building consortiums to work alongside the AI giants that are threatening to gut their portfolios.
Driving the news: OpenAI and Anthropic each are in talks with different PE groups to create something akin to enterprise AI consulting arms.
Zoom in: The OpenAI discussions are with such firms as Advent International, Bain Capital, Brookfield, and TPG, as first reported by Reuters.
- A source says that the effort likely would be structured as a majority-owned subsidiary of OpenAI, staffed by forward-deployed engineers who could both advise and implement. The PE firms would serve as minority investors and initial customers.
- Anthropic's discussions are with such firms as Blackstone, Hellman & Friedman and Permira, and were first reported by The Information.
- This one may be structured more like a joint venture, although no final decisions have been made. The talks began several months ago (i.e., before Anthropic's dustup with the Pentagon).
- It's unclear if either deal would require exclusivity, although it sounds unlikely.
The big picture: Private equity wants a seat at the AI table.
- Not only because portfolios are chock-full of software companies under siege, but also because many of their other portfolio companies don't really know how to best integrate AI.
- Yes, they could pay for OpenAI or Anthropic licenses. But then what? More than a few CEOs have lamented the time and money already lost on failed AI experiments.
- For the AI companies themselves, this is about pushing deeper into the enterprise — where the checks are bigger and the revenue is usually recurring.
- It's a whole lot faster for OpenAI and Anthropic to partner with PE firms than to approach each of their portfolio companies independently, and these efforts could be a test ground for non-PE enterprise clients.
Flashback: If all of this sounds familiar, you're perhaps old enough (I'm sorry, experienced enough) to remember Avanade — a JV formed in 2000 between Microsoft and Accenture to implement Windows and other Microsoft solutions into large enterprises.
- Not apples-to-apples, but similar enough. In that case, Accenture eventually acquired a control stake, with Microsoft retaining a minority position.
- Meanwhile, Accenture just yesterday completed its acquisition of Faculty, a VC-backed company in London that helps corporate clients adopt AI.
The bottom line: Private equity and Big AI need each other.
