Bank of America reverses course, hands OpenAI a $520M credit line
What's the deal? Bank of AmericaDealroom has a profile for this one. Try Dealroom → has extended a $520 million credit line to OpenAI in recent weeks, according to people with knowledge of the matter. The deal is debt, not equity, and reverses the lender's earlier decision to spurn the same request from the AI company.
Why now? OpenAI's preparations for an initial public offering influenced the bank's decision, the people said. Securing a spot on the IPO appears to have shifted the calculus for the second-largest US lender.
What changed? The financing marks a notable pivot for Bank of America and its risk-wary chief executive officer, Brian Moynihan. As recently as last year, the bank's executives were skeptical that ventures with such heavy capital spending could sustain their business models.
What could go wrong? OpenAI remains a money-losing company, and the bank's own executives previously doubted whether such AI startups could sustain their business models. Lending against an anticipated IPO carries risk if that offering slips or underperforms.
The signal: At $520 million, the loan ranks among the largest US deep tech debt deals on record, above the 99th percentile of comparable rounds. It signals that established lenders are increasingly willing to bankroll capital-hungry AI companies — provided a payday like an IPO is in sight.
Read more: Bloomberg Law
