Private equity (PE) firms are accelerating their embrace of artificial intelligence (AI), predictive analytics, and digital deal platforms, fundamentally reshaping due diligence, value creation, and operational efficiency.
According to a recent World Economic Forum overview, over 80% of PE workflows already rely heavily on digital technologies for sourcing, due diligence, and portfolio management and 95% of firms plan to expand AI investments in the next 18 months.
Generative AI is rapidly moving beyond pilot stages. Insights from Bain’s “Insurgency” report reveal that leading PE firms are investing in capabilities that allow portfolio companies to adopt AI strategically and capture tangible returns Moreover, reports such as Harvard Business Review’s (HBR) recent feature underscore that AI is not just for automation, it is used for rapid value realization across the entire PE cycle, particularly in identifying performance highways.
AI mobilization has become deeply embedded within the firm. In a PE giant company, approximately 90% of employees now use tools like ChatGPT and Copilot, supported by an AI champions’ council and firm-wide training initiatives. The result? Legal invoice reviews, investment analysis, and workflow automations that once took weeks now happen in hours. PE’s use of AI-powered platforms is also expanding. Datasite’s acquisition of AI-enabled Grata has enhanced middle-market deal sourcing and diligence, now serving clients like KKR, Carlyle, and Microsoft.
Where Family Offices Are Falling Behind, But Catching Up
Despite their agility and long-term orientation, many family offices are trailing in formal tech adoption, even though they oversee significant capital and complex portfolios. The 2025 BlackRock Global Family Office Survey reveals that a majority of family offices cite gaps in reporting (57%), deal sourcing (63%), and private-markets analytics (75%). As a result, many are turning to outsourced partners or OCIO models to fill the gap.
FundCount’s analysis warns that persistent underinvestment in core technologies leaves many family offices at risk, not only facing operational inefficiencies and security vulnerabilities but also falling behind in an investment landscape where data fluency is becoming a competitive edge.
Encouragingly, BNY Family Office Insights 2025 shows that progress is underway. Over half of family offices now deploy risk management software, advanced analytics, and AI/ML tools. Adoption is particularly notable outside the U.S., where predictive modeling and AI usage has surged to 59%. This regional divergence suggests that non-U.S. family offices, often operating in more volatile or less transparent markets, are turning to technology out of necessity to sharpen insights and manage risk with greater precision.
By contrast, U.S. family offices reported year-over-year declines in AI deployment. This retrenchment points to the structural challenges many still face, from integration complexity and legacy systems to cultural hesitation about relying on machine intelligence. The result is a widening digital divide, with some family offices accelerating into the future while others risk being left behind.
The Competitive Implication of the Divide
The divergence in technology adoption is no longer a back-office issue, it is becoming a foundational differentiator in how firms compete, create value, and position themselves in private markets.
For Private Equity (PE)
- Sharper Due Diligence – AI is now a core enabler of speed and accuracy in dealmaking. Tools can scan thousands of pages of financials, contracts, and compliance documents within hours, flagging anomalies and red-flag risks that would previously take weeks of manual effort. This compression of timeframes not only accelerates decision-making but also widens the deal funnel, enabling firms to assess more opportunities with fewer resources.
- Data-Led Value Creation – Beyond transactions, firms are embedding AI into portfolio monitoring and operations. Real-time KPI tracking, predictive churn analysis, and customer sentiment monitoring give managers a proactive edge. Instead of reacting to quarterly results, they can course-correct in near real time, amplifying value creation strategies and unlocking operational alpha.
For Family Offices (FOs)
- Constraints from Lagging Adoption – Many family offices still underinvest in core technologies, limiting them to reactive investing. Outdated reporting systems, weak data analytics, and fragmented processes not only create inefficiencies but also increase exposure to risks, from cyberattacks to poor oversight of complex global portfolios. As competition for high-quality deals intensifies, these gaps translate into missed opportunities.
- Upside for Early Adopters – On the other hand, offices that are leaning into AI and analytics are starting to see tangible benefits. Enhanced decision quality, sharper portfolio insights, and improved transparency for principals are becoming differentiators. Scalable digital processes allow smaller teams to punch above their weight, matching the sophistication of institutional investors without the same overhead.
Bridging the Gap: What Family Offices and PE Firms Can Learn
- Family Offices Must Professionalize Tech Infrastructure
For family offices, underinvestment in technology is no longer sustainable. Building robust data infrastructures, spanning analytics platforms, AI-driven scoring models, and real-time risk dashboards is critical to staying competitive. Those that modernize early not only reduce inefficiencies and vulnerabilities but also gain a disproportionate edge over peers who remain analog. - PE Can Harness Human-AI Synergy
For private equity, the next frontier is not replacing human judgment but amplifying it. AI excels at scanning documents, detecting anomalies, and surfacing insights, but its greatest value comes when paired with seasoned investment intuition. Firms that cultivate this human–AI partnership set the pace for faster, more informed, and more resilient decision-making. - Governance and Security Are Non-Negotiable
As AI adoption accelerates, governance and security standards must evolve in parallel. Transparent processes, explainable models, and built-in auditability are essential to ensure both operational integrity and regulatory compliance. Embedding these guardrails from the outset transforms AI from a tactical tool into a trusted, long-term enabler of competitive advantage.
This year, data fluency is investment currency. Private equity firms have moved decisively to harness AI for faster deal evaluation and smarter portfolio management, while many family offices still lag behind — though a growing subset is catching up.
The real winners will be those who merge AI-driven tools with disciplined execution. As private markets grow more information-driven and less relationship-driven, the ability to process and apply intelligent data is rapidly replacing prestige as the ticket to future deal flow.
