Why OpenAI’s 17.5% Guaranteed Return Sparks “Terra Luna” Comparisons
OpenAI's offer of a 17.5% guaranteed return to private equity firms has drawn comparisons to the Terra Luna collapse due to high projected losses.Summary
OpenAI is offering private equity firms a guaranteed minimum preferred return of 17.5% on new joint ventures, alongside early access to unreleased AI models, to secure approximately $4 billion in commitments. This high guaranteed rate has alarmed industry leaders, including Nansen CEO Alex Svanevik and former BlackRock manager Edward Dowd, who compare it to the unsustainable yields offered by Terra's Anchor Protocol before its 2022 collapse.
The comparison stems from structural similarities: both involve above-market guaranteed yields offered by entities spending far more than they earn, relying on continuous capital inflows. OpenAI projects $14 billion in losses by 2026 despite a $20 billion annualized revenue run rate by the end of 2025. Skepticism is evident, as firms like Thoma Bravo declined participation.
However, the comparison breaks down because OpenAI generates substantial, real revenue from enterprise adoption, unlike Terra, which relied on speculative inflows. OpenAI uses preferred equity, a standard corporate finance instrument. Ultimately, the aggressive 17.5% floor suggests intense capital competition in the AI race, raising concerns about whether this financial engineering is a shrewd move or a sign of an overheated cycle dependent on converting PE access into contracts before projected losses erode confidence.
(Source：BeInCrypto)