The AI Divide: How Private Equity is Winning while Mid-Size Companies Lag Behind

April 26, 2024

2 min

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The AI Divide: How Private Equity is Winning while Mid-Size Companies Lag Behind

"While [AI platforms] are still evolving rapidly, applying AI will increasingly become table stakes in how people run their businesses, whether you’re the operator or the private equity firm.” - Devin Ryan, Director of Research, Citizens JMP Securities.

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Private Equity (PE) Firms will be investing more in AI

PE firms are ahead of the curve – 97% of PE financial leaders say they’re using AI.
Operational Efficiency gains – 81% of decision makers at PE firms say AI made business easier.
Confidence in benefits is growing, but concerns for potential risks remain – firms say that legal compliance, errors and privacy violations are risks that are holding them back.
85% of PE firms expect their AI investment levels to increase – PE firm success likely is increasing confidence to explore more use cases.

In Mid-Size Companies AI adoption is lead by CFO's

CFOs of mid-size companies are leading the way – 87% of AI implementations are lead by the CFO.
Both groups are using AI to automate manual processes – these efficiencies can reduce costs and make employees more productive.
AI for cash flow forecasting and financial analysis – 76% of mid size-firms are using AI, with the majority of use cases applied to forecasting and financial analyses.
54% of mid-size companies vs 69% of PE firms are confident in their ability to leverage AI – 52% of mid-size businesses cite a lack of AI education/training.

SOURCES

[1] Escalent Research on behalf of Citizens Bank

https://www.citizensbank.com/corporate-finance/insights/artificial intelligence-trends-report.aspx

https://www2.deloitte.com/us/en/pages/center-for board effectiveness/articles/future-of-tech artificial-intelligence.html

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