OpenAI Takes Stake in Thrive Holdings, Adding to Circular Deals

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(Bloomberg) -- OpenAI is taking an ownership stake in Thrive Holdings, an investment vehicle set up earlier this year by Thrive Capital, adding to a growing list of circular deals involving the ChatGPT maker and its backers.

Thrive Capital, one of OpenAI’s top investors, set up Thrive Holdings earlier this year with the goal of starting and acquiring companies that can benefit from artificial intelligence. As part of the tie-up announced Monday, OpenAI will work with Thrive Holdings to speed up business adoption of AI, starting with accounting and IT services.

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OpenAI plans to embed teams within Thrive Holdings’ companies “to boost speed, accuracy, and cost efficiency,” the companies said. Terms were not disclosed for OpenAI’s stake in Thrive’s venture.

Founded in 2010 by Josh Kushner, Thrive is best known for making a small number of big bets and often holding them for years. Recently, Thrive has turned its focus to AI. The firm first invested in OpenAI in 2023 at a $27 billion valuation. Later that year, it led a $6.6 billion investment in the company that valued it at $157 billion, a staggering valuation for the time. In April, the firm introduced Thrive Holdings, taking a page from the private equity playbook.

The partnership between OpenAI and Thrive Holdings is aimed at bolstering enterprise adoption of AI, a key focus for both firms. OpenAI and rival developers are eager to prove the business value of their systems and sign up more customers to help offset the immense cost of building and running AI systems.

“This partnership with Thrive Holdings is about demonstrating what’s possible when frontier AI research and deployment are rapidly deployed across entire organizations to revolutionize how businesses work and engage with customers,” Brad Lightcap, OpenAI’s chief operating officer, said in a statement. “We hope this partnership serves as a model for how businesses and industries around the world can deeply partner with OpenAI.”

But the move also adds to a wave of OpenAI deals that have been criticized for being circular in nature.

Nvidia Corp., for example, agreed to invest as much as $100 billion in OpenAI to help the AI startup fund a data-center buildout. OpenAI in turn committed to filling those sites with millions of Nvidia chips.  Weeks later, OpenAI inked a partnership with Nvidia rival Advanced Micro Devices Inc. to deploy tens of billions of dollars’ worth of its chips. As part of the tie-up, OpenAI is poised to become one of AMD’s largest shareholders.

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