AI isn’t coming. It’s here.
AI in the private markets has moved from buzzword to business essential. According to our survey on the use of AI in the private markets, nearly 80% of GPs are no longer just testing the waters—they’re either piloting AI in select use cases or actively deploying it across multiple departments. This isn't gradual adoption, it's a wholesale embrace of transformative technology. The message is clear: AI isn’t coming. It’s here.
Venture leads, others follow
Perhaps unsurprisingly, venture capital firms are spearheading this technological revolution. An impressive 86% of VC general partners are actively using or piloting AI solutions, significantly outpacing private equity (75%) and real estate fund managers (68%).
This leadership position makes perfect sense when you consider that AI-related investments accounted for 71% of VC funding in Q1 2025. That shouldn’t come as a surprise—venture investors have always been early to spot trends, and their portfolios reflect a deep familiarity with AI-powered products and pain points.
The tools of choice
Nearly 67% of organizations use GenAI products for tasks involving human language and content generation. Adoption is overwhelmingly powered by general-purpose large language models (LLMs) such as Claude, Gemini, and ChatGPT. In fact, 91% of fund managers say they use them, whether for research, drafting, or analysis. Compare that to the 51% that indicated they also use add-ons or integrations like Zoom AI Companion, and the paltry 37% of respondents said they use job-specific point solutions.
Early proof points: Efficiency and risk management
GPs are already seeing results thanks to the AI:
84% of GPs report saving time, with nearly half reclaiming 4–6 hours per week
78% report higher efficiency across teams
44% are unlocking new insights from existing data
44% have scaled operations without adding headcount
Top use cases center on language-driven workflows: document review, investor communications, and risk flagging. One PE firm used generative AI to automate investment memo creation, reportedly saving up to 80% of senior investment staff's time and reallocating resources to strategic evaluation.
Our survey indicates that most firms across asset classes have been able to drive operational cost reductions. Secondary benefits include enhanced reporting efficiency across PE and CRE, and improved deal sourcing capabilities for VC firms.
Notably, only VC GPs (13%) currently view AI as a valuable tool for scaling relationship management, suggesting significant untapped potential in this area.
One other interesting takeaway—private equity fund managers are uniquely prioritizing compliance as a top-three use case, an indication that AI is as much about reducing risk as it is about increasing speed.
How so? Electronic communication surveillance (ECS) refers to the monitoring, reviewing, and analyzing of digital communications, including emails, instant messages, video calls, social media interactions, and texts. Traditionally, ECS systems relied on static keyword lists and manual reviews, leading to an overwhelming number of false positives and missed signals. With AI, firms can now monitor communications at scale while surfacing genuinely risky behavior, often in real time.
Where it’s headed next
If today’s story is about efficiency, tomorrow’s is about scale. Algorithms can process enormous volumes of data, including financials, patents, clinical trials, and customer sentiment—all in a fraction of the time it would take a human team. As Johnathan Balkin, Founder of Alpha Alternatives, notes: “A person putting together an investment memo only has the brain capacity to handle a certain number of data sources. But if you can leverage AI, you can look at 5,000 companies. You can look at a data set of a million different things and have AI run thousands of scenarios for you.”
GPs see the next frontier for AI in:
Deal sourcing and screening
Portfolio monitoring and reporting
Valuation modeling
For instance, one VC firm evaluating a pharma startup deployed AI tools to review patent databases, analyze clinical trial outcomes, and gauge public perception via media and social platforms.
On the reporting side, AI holds the potential to automate LP communications, generate capital account statements, and streamline compliance documentation—all while improving accuracy and turnaround time.
The roadblocks to watch
Despite the promise of AI, firms remain aware of its limitations. The biggest concerns are:
Data privacy and security
Lack of internal expertise
Integration with existing systems
Optimism wins out
Even with those challenges, the outlook is overwhelmingly positive: 85% of GPs surveyed expect to see moderate to substantial value from AI within the next two years. Another study found that while only 2% of PE firms expect to see significant AI-driven value in 2025, a staggering 93% expect moderate to substantial AI benefits within three to five years.
The bottom line? Private markets GPs aren’t just experimenting with AI—they’re building a foundation for a new era of efficiency, risk management, and scale. The firms that embrace these tools today are positioning themselves to lead tomorrow.