Health and Tech Institute
strategy for continuous transformation
Joaquim Cardoso MSc
Chief Researcher and Strategy Officer (CRSO),
Editor in Chief, and Senior Advisor.
June 2, 2023
Key Takeaways
Investors, including venture capital funds, private equity groups, and accountancy firms, are increasingly turning to artificial intelligence (AI) tools to gain an edge over rivals in dealmaking and investment decisions.
- AI technologies are being used to identify acquisition targets, evaluate start-ups for investment, and assess growth potential based on financial analysis.
KPMG, Coatue, Headline, and other firms are incorporating AI tools into their processes.
- For example, KPMG has used the technology behind OpenAI’s ChatGPT to create a system based on its own data,
- while Coatue’s software, Coatue Brain, integrates generative AI to extract key points from research and pitch decks.
- PitchBook has developed an AI-driven “VC exit predictor” tool that evaluates the likelihood of a company going public or being acquired, claiming a 75% accuracy rate.
- Headline and Moonfire Ventures have used generative AI to assess and compare investment targets based on metrics like web traffic and new users.
The increased use of AI in investment raises questions about the role of human relationships and judgment. However, industry experts believe AI enhances decision-making rather than replacing traditional roles.
Gartner predicts that AI and data analytics will inform over three-quarters of venture capital and early-stage investments by 2025.
Concerns about bias and limited data arise in the use of generative AI. Efforts are being made to mitigate bias and set rules for AI to avoid considering certain attributes, such as gender, when evaluating founders of companies.
Despite advancements, there is still limited guidance on using AI for cutting-edge investments, making human judgment and expertise crucial in such cases.
Based on “Investors turn to AI-guided dealmaking to gain edge over rivals”
https://www-ft-com.ezp.lib.cam.ac.uk/content/b3f99975-1846-409b-b0fc-b220c37d51e8
