BofA lends $520M to OpenAI, eyes IPO advisory role

Key Takeaways

• Bank of America has extended a $520 million credit line to OpenAI, becoming one of the AI company's largest lenders.
• BofA is positioning for advisory roles on both OpenAI's and Anthropic's planned IPOs.
• The bank has helped raise nearly $500 billion in capital for AI-related companies since 2025, capturing 60% of AI-related capital markets financing.

Bank of America has extended a $520 million credit line to OpenAI, marking its first loan to the ChatGPT maker as the company prepares for what could be a $1 trillion initial public offering. The deal makes BofA one of OpenAI's largest lenders and signals Wall Street's aggressive positioning for what may become one of the decade's most lucrative tech IPOs.

OpenAI confidentially filed for a U.S. IPO last month. The listing could arrive as soon as this year, according to Reuters, and the company is targeting a valuation north of $1 trillion. For context, SpaceX debuted in June at a valuation exceeding $2 trillion after completing the world's largest IPO.

Why is BofA betting big on AI financing?

The loan is not just about OpenAI. It cements BofA's credentials as the dominant player in AI-related capital markets financing. According to internal data seen by Reuters, the bank has helped raise nearly $500 billion in capital for AI-related companies since 2025. That figure represents 60% of all AI-related fundraising across investment-grade debt, leveraged finance, and equity capital markets.

BofA is also eyeing advisory roles on the planned IPOs of both OpenAI and Anthropic, according to a second source familiar with the matter. The bank already served as a joint bookrunner on SpaceX's blockbuster IPO and led the U.S. retail distribution effort for that offering.

Mega IPOs generate hundreds of millions of dollars in fees for investment banks. More importantly, they open the door to years of follow-on business: secondary offerings, debt financing, M&A advisory, and more.

OpenAI's path from nonprofit to trillion-dollar listing

OpenAI was founded in 2015 as a research-focused nonprofit. Four years later, it created a for-profit arm to fund the soaring costs of developing AI systems. Training large language models requires massive compute infrastructure, and that infrastructure costs billions.

The company raised $6.6 billion in October 2024, its largest private funding round ever, at a reported $157 billion valuation. The new credit line from BofA adds another layer of financial backing as OpenAI scales its operations and prepares for public scrutiny.

A $1 trillion valuation would place OpenAI among the most valuable public companies at debut. It would also represent a roughly 6x increase from its October 2024 private valuation in less than a year.

What does this mean for other AI companies?

BofA's dual interest in OpenAI and Anthropic IPOs reflects Wall Street's view that multiple AI companies can command premium valuations. Anthropic, backed heavily by Amazon and Google, has emerged as OpenAI's most credible competitor in the foundation model race.

For enterprise software companies building on AI infrastructure, the financing environment looks increasingly favorable. Banks are eager to deploy capital into anything adjacent to the AI trade. That creates opportunity for founders seeking debt financing or preparing for their own public offerings.

The stakes for Wall Street

OpenAI and Anthropic represent generational opportunities for investment banks. The fees from a $1 trillion IPO alone could exceed $100 million. But the real prize is becoming the go-to bank for AI companies, a category that now attracts more capital than any other in tech.

BofA's aggressive moves, from SpaceX to OpenAI, suggest the bank views AI financing as a strategic pillar rather than an opportunistic trade. Other major banks will need to respond or risk ceding the category entirely.

Frequently Asked Questions

How much is BofA lending to OpenAI?

Bank of America has extended a $520 million credit line to OpenAI, making it one of the company's largest lenders.

When is the OpenAI IPO expected?

OpenAI confidentially filed for a U.S. IPO last month and could list as soon as 2025, according to Reuters reporting.

What valuation is OpenAI targeting for its IPO?

OpenAI is targeting a valuation exceeding $1 trillion for its public listing, up from approximately $157 billion in its October 2024 private round.

Is Bank of America advising on other AI company IPOs?

Yes, BofA is eyeing advisory roles on both OpenAI's and Anthropic's planned IPOs, according to sources familiar with the matter.

How much capital has BofA raised for AI companies?

Bank of America has helped raise nearly $500 billion in capital for AI-related companies since 2025, accounting for 60% of AI-related capital markets financing.

Source: Tech-Economic Times / ET