Andretti Acquisition Corp. (WNNR) Signs LOI with Generative AI Company

Andretti (NYSE:WNNR) announced this morning that it has signed a non-binding letter-of-intent (LOI) to combine with a generative AI software company.

The SPAC expects this to progress to a definitive combination agreement in this quarter. But, because there is not yet any guarantee this will happen, Andretti will remain in SPACInsider‘s “Searching” column for now.

Although many SPAC targets have trumpeted the use of AI and machine-learning technologies in their platforms, purely generative AI companies are somewhat novel. Their use in generating text and images has become an increasing source of amusement and alarm.

It also in some ways seems fitting that a SPAC may be the first vehicle to take a pure-play generative AI company to market. OpenAI, the most scaled independent firm in the space, has long fended off IPO speculation despite raising $10 billion from Microsoft over the years.

The company, which created ChaptGPT, also currently has a “capped-profit” company structure that may never be compatible with a public listing even if its management so desired. And, for the time being, it does not.

Any SPAC transaction could potentially benefit from an established predecessor testing the market first and pricing themselves accordingly. But, being the first could also generate some lucrative momentum.

Andretti currently has about $244 million in its trust and is coming up on its initial transaction deadline of July 18. It has set July 14 next week as the date for an extension vote to allow it to extend this to April 18, 2024 without contributing to its trust. It opened this morning at $10.64, above its $10.61 redemption rate.

The SPAC’s sponsor may also automatically extend its deadline by three months two times if the sponsor purchases $2 million private placement warrants for $1 per warrant.