There's much debate about whether artificial intelligence (AI) can transform the private equity market. A recent Forbes article, "AI Is Becoming the New Strategy for Private Equity," aptly captures the point. Major players in the financial industry, once relying on intuition and endless spreadsheets, are now turning to AI for success. Success stories like Carlyle Group, which has reduced due diligence time from weeks to hours, are hard to ignore. This efficiency boost is transformative.
However, simply describing this change as a "new strategy" seems a bit of an overstatement. This isn't just about completing the same work faster; it's about fundamentally changing the way we work.
It's not just about speed; it's about asking better questions.
The Forbes article highlights how AI is improving the deal sourcing and due diligence processes. Analysts who once worked in data rooms are now using AI to sort through vast amounts of information and identify promising investment opportunities in record time. This in itself is a significant advancement. But the real change is yet to come.
Just imagine: what happens when every firm has access to the same fast AI tools? Speed will no longer be a competitive advantage; it will become the norm. The companies that stand out will be those that ask the most profound questions and develop the best strategies. As AI dominates the "what," key human contributions will focus on the "why" and "what."