Institutional Investor explores a critical challenge: while many AI products promise revolutionary changes, relatively few companies have truly realized AI's full potential in practice. This article highlights how private equity firms are increasingly stepping in to guide their portfolio companies (PortCos) in effectively leveraging artificial intelligence for genuine business transformation. It suggests that PE firms can serve as crucial navigators, helping companies, especially those feeling overwhelmed by the complexity and rapid pace of AI advancements, to identify precisely where AI can generate tangible value.
The piece points out that PE firms often bring a pragmatic, results-oriented approach, helping PortCos cut through the hype and focus on implementable AI solutions that drive real-world improvements. This includes guiding them on strategic investments in AI, identifying appropriate use cases, and helping with implementation challenges. Beyond aiding PortCos, the article also briefly touches on AI's potential to enhance the investment process within PE firms themselves, though it stresses the importance of focusing on substance and measurable impact rather than just marketing rhetoric when deploying AI.
