AI helped funds find deals faster, and cut what some of their companies were worth.

A private equity or venture fund makes money in two ways. It charges a yearly fee on the money it manages. And it keeps a share of the profit when it sells a company for more than it paid. AI now touches both, and it has already moved prices.

It helps with deal work. Most funds now use AI to find targets and read the papers in a deal. In one survey of 1,000 dealmakers, 86% said they had built AI into their deal work. Private equity firms led. Fund managers say this is where AI pays off most so far.

It can raise profits in the companies you own. Funds are asking their companies to use AI to cut costs, sell more and build new products. The results are uneven. In a survey from early 2026, nearly 40% of fund managers did not expect AI to make a real money difference in their companies that year. So far, most of the gain is lower costs, not more sales.

It can cut what the companies you own are worth. This is the part that moved fastest. Software stocks fell almost 30% between October 2025 and February 2026. Investors feared that AI tools would do the work many software products sell. When public prices fall, private prices follow. Within weeks, buyers of stakes in tech-heavy funds asked for discounts of up to 20%. A few weeks earlier, they had asked for about 5%. Funds that bought software companies at high prices, with borrowed money, felt it most.

Lenders are asking the same question. Funds that lend to software companies were hit too. Bank analysts think a quarter to a third of private lending is exposed to AI. A company whose lender now worries about AI will pay more to borrow.

Venture money is piling into a few names. In the first three months of 2026, AI companies took 80% of all venture money in the world. Four companies took most of it. For most venture funds, the hard part is finding good AI companies that are not already priced for perfection.

Regulators check what funds claim. The US regulator says its examiners will check whether advisers tell the truth about their AI use. In 2024 it fined two advisers for claiming AI they did not have.

Time saved is not money saved. When AI makes an analyst faster, the fund saves money only if it does more deals with the same team, or hires fewer people. Otherwise it has bought free time, not profit.

Here is what that looks like in practice. A fund bought a software company for $400 million. That was 15 times its yearly profit. Now its customers can do part of that work with a general AI tool. Buyers now pay 10 times profit for companies like it. So the same company is worth about $270 million, even though nothing has gone wrong inside it yet.

What should a fund's leaders do first? Three plain things.

1. Check every company you own. Ask how much of what it sells a general AI tool could now do instead. Rank the companies by that answer.
2. Ask the same question in every new deal, before you set a price.
3. Make sure everything your firm tells investors about its own AI use is true and can be shown.

None of this needs a new team. It needs one partner who owns each answer.

The full guide shows where AI touches a fund's money, what funds have actually done, who gains and who loses, and what to ask before you spend.