AI: Transforming the Norm

The AI revolution is well and truly happening. We’ve all seen it this year, with Open AI’s tool, Chat-GPT, entering the public consciousness. Such was its impact that it had 100 million users within two months. No other technology tool has even come close to such instant, widespread adoption.

For private equity, this is an exciting time. Blackstone’s Stephen A. Schwarzman enthused about the potential transformation that AI could offer at IPEM Paris 2023, this September (watch the video). A packed room (IPEM Paris 2023 had over 6,000 attendees) listened to Schwarzman discuss the wider implications of AI to government, education, and medical innovation, noting that it could help increase the ability to develop new drugs by three to five times.

If the first version of Chat-GPT had the equivalent IQ of a genius (above 140), in three to five years’ time, it will have an IQ of 12,000. For private equity firms, one can only imagine what this level of super intelligence could mean to how they approach portfolio transformation. This will be one of the key topics of discussion at IPEM Cannes 2024, where one of the afternoon summit sessions on Day 1 (Jan. 24th) will be “Portfolio Transformation”.

What PE groups must now consider is how quickly, and to what extent, their peers are looking to implement AI to help improve the fortunes of portfolio firms. The risk is this: those who are slow to use AI could find that their competitors become more formidable, and firms that they thought were doing fine, actually become mediocre (or worse).

Schwarzman is in no doubt as to the importance of AI. Blackstone is, for example, the largest developer and builder of data centers in the world. As Schwarzman said: “The demand for data centers, which you need to process AI systems, is through the roof.”

“Strap yourself in on this one,” said Schwarzman. “You do not want to be a second mover in AI.”

Happy Holidays and see you all in Cannes to celebrate the 10th edition of IPEM! 🎉