Bank of America Extends $520 Million Credit Line to OpenAI, Eyeing IPO Advisory Role

The Deal Bank of America extended a $520 million credit line to OpenAI, according to Bloomberg, which published the report on July 8, 2026. The bank had previously declined an earlier loan request from OpenAI, making this reversal notable. The credit line is OpenAI's first loan from Bank of America. The terms—covenants, interest rate, maturity—have not been publicly disclosed.

Why the Reversal Bloomberg's reporting, summarized by PYMNTS and Intellectia.AI

attributes Bank of America's change of position to relationship-building ahead of a possible OpenAI IPO. Lend now, earn the underwriting mandate later. OpenAI confidentially filed for a U.S. IPO last month, according to Intellectia.AI, targeting a valuation exceeding $1 trillion. If that deal closes anywhere near that number, the investment banking fees could run into the hundreds of millions of dollars. A $520 million credit line is a relatively small price to pay for a seat at that table. Bank of America is also reportedly pursuing advisory roles for the IPOs of both OpenAI and Anthropic, as well as advisory work related to SpaceX transactions.

BofA's AI Financing Position

This isn't a one-off bet. Since 2025, Bank of America has reportedly raised nearly$500 billion for AI-related companies, according to Intellectia.AI, representing roughly 60% of fundraising across investment-grade debt, leveraged finance, and equity capital markets in the sector. (Note: this figure, as reported via Intellectia.The OpenAI credit line is consistent with the bank's deliberate strategy to become the go-to financial institution for frontier AI. UBS raised its price target on Bank of America stock to $68 from $63 on July 7, 2026, maintaining a Buy rating. Evercore ISI raised its target to $63 from $61 on July 6, 2026, keeping an Outperform rating, citing "significant growth in equity markets, robust M&A activity, and strong trading volumes" tied to AI.

What the Debt Structure Actually Means

For OpenAI, a credit line extends liquidity without forcing the company to issue new equity right now. Equity dilution has real costs for existing shareholders, including the employees and early investors who are counting on an IPO payday. Borrowing instead buys time and preserves the cap table. Frontier AI is extraordinarily compute-intensive. Training large models requires sustained investment in chips and data center capacity that doesn't pause while you wait for the next equity round to close. Debt bridges that gap.

The Legitimate Concern

Banks Chasing Fees, Not Fundamentals Critics of this kind of deal have a fair point. Bank of America previously said no to OpenAI, and the thing that changed wasn't OpenAI's balance sheet or revenue trajectory. It was the prospect of IPO fees. That means a major financial institution extended half a billion dollars of credit primarily as a business development expense, not because the underwriting analysis independently supported it. OpenAI's financials are not fully public. The company has reported substantial operating losses historically, and its path to profitability at scale remains unproven. If the IPO gets delayed, cancelled, or prices far below the $1 trillion target, Bank of America holds a large loan to a company that burns enormous amounts of capital, without the fee income that was supposed to justify the relationship. That said, Bank of America is not a startup making its first bet. The bank manages trillions in assets and has a full credit team. The decision to extend the line presumably cleared internal risk review. Whether the terms adequately price that risk is unknown without seeing the covenant structure.

What's Still Unknown The sources here are all drawing from Bloomberg's reporting, which

itself relied on anonymous sources rather than official disclosures. OpenAI has not confirmed the deal publicly. No SEC filing or prospectus exists yet to verify the IPO timeline, the $1 trillion valuation target, or the credit line terms. The next concrete data point will be OpenAI's IPO filing, if and when it becomes public. That document will show whether Bank of America is listed as an underwriter, what OpenAI's actual financial condition looks like, and whether the $1 trillion valuation target has any earnings or revenue math behind it.