How AI is Transforming Private Markets, Much Like Ford Revolutionized Manufacturing
Whether or not you drive one today, the Ford Motor Company forever changed the way products are manufactured.
By pioneering the assembly line, Ford introduced a system where vehicles moved along a conveyor belt, with each worker handling a single aspect of production. This breakthrough slashed the time required to build a car from 12.5 hours to just 1.5 hours, an 88% reduction. The efficiency gains allowed Ford to double industry-standard wages for what was otherwise repetitive, monotonous work.
Today, a similar transformation is unfolding, driven by artificial intelligence (AI). Unlike Ford’s era, however, AI is not making work more monotonous but instead enabling professionals to offload routine, repetitive tasks. This shift allows them to concentrate on strategic initiatives that require innovation and creativity.
According to PwC, 2024 marks the turning point for private companies to invest in AI. The technology is now scalable and accessible to businesses of all sizes, providing smaller firms with an advantage over their larger counterparts.
“With a ready-to-use bundle or ‘starter pack’ of services, almost any company can give employees access to secure, risk-managed AI,” PwC’s 2025 AI Business Predictions report states.
Investors are following suit. Pitchbook reports that private equity and venture capital investment in AI and machine learning soared to $150B in 2024, marking a nearly 60% increase from the previous year. This surge is fueling the widespread AI enthusiasm seen across industries.
However, AI's rise also brings cybersecurity concerns. With global cybercrime costs projected to reach $10.5T annually, these worries are well-founded.
“This is a very emergent technology. There has been amazing progress over the last two years, but media reports about hallucinations and security stick,” says Sachin Anandikar, CTO at Pemberton Asset Management. “There are answers to those concerns, but for those who don’t want to learn, it becomes difficult for them to understand the complexities of the technology.”
To address these concerns, many AI tools tailored for private markets prioritize security, ensuring client data remains protected. Some solutions keep data entirely within a company’s internal system, while others confine it to secure, private cloud environments.
Additionally, private market firms are advised to work with reputable providers that partner with established security firms and maintain certifications such as ISO/IEC 27001:2022, SOC2, and Cyber Essentials.
For private capital firms, particularly those with lean legal teams, AI adoption could be a game-changer. Yet skepticism about AI’s true capabilities remains a hurdle. More education is necessary to align AI providers’ promises with users’ expectations.
“I also think some AI providers are overpromising, which doesn’t help, signposting near-term capabilities that I just don’t see them delivering,” says Paul Loynes, Legal Consultant and former General Counsel and Partner at SoftBank Investment Advisers.
To assist private capital firms in identifying AI’s most effective use cases, Robin AI has outlined five core business objectives that AI can currently support in its latest AI in Private Markets report.
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1. Speed
Private equity firms have record levels of dry powder, but market conditions require balancing speed with caution. AI can expedite processes like side letter management without compromising quality, helping firms to close deals faster.
2. Efficiency
Due diligence and fundraising are becoming more complex and time-consuming. AI can streamline initial diligence tasks, freeing up teams to focus on finalizing deals more efficiently.
3. Compliance
Despite potential regulatory easing in the U.S., fund managers and LPs face increasing global regulatory requirements and demands for investment transparency, particularly around ESG criteria. AI simplifies compliance by tracking and reporting obligations across jurisdictions without adding workflow complexity.
4. Relationships
Evolving fund structures, longer holding periods, and growing market complexity necessitate better communication. AI-powered document management and contract negotiation solutions free up time for more meaningful investor interactions and stronger stakeholder relationships.
5. Insights
AI enables institutional investors and GPs to extract valuable insights from unstructured legal documents, turning contract repositories into strategic data assets that enhance decision-making.
The AI-driven transformation of private markets is already underway. Much like Ford’s assembly line reshaped manufacturing, AI is poised to redefine how private firms operate—boosting efficiency, enhancing compliance, and unlocking new opportunities for growth.