Artificial intelligence is moving from a back-office efficiency tool to a mandatory lens in private equity and venture capital dealmaking, according to senior investors at the Asia PE-VC Summit in Singapore. Warburg Pincus senior managing director Vishal Mahadevia said the firm now requires an explicit AI thesis for every investment, covering how AI might disrupt the target business model and how the technology can be deployed to drive operational alpha.
“We cannot invest in any deal unless there is a view on how technology and AI will have an impact on that business,” Mahadevia said, adding that the mandate applies across services, manufacturing, and digital businesses. The firm has built internal AI tools that ingest decades of investment memos and generate a structured “case against” each new proposal, effectively adding another independent voice in investment committee discussions. Every underwriting case now includes scenario analysis around AI’s impact, particularly in sectors such as BPO and IT services where automation could threaten existing models.
The broader discussion among private markets investors highlighted both AI’s rapid adoption and its limits. Yi Pan, principal at Neuberger, said a survey of more than 140 general partners found about 90% were increasing AI spending in due diligence, while about 78% were increasing spending on AI in the investment decision process. Pan argued AI can help investment committees build conviction by offering broader analysis, but it remains a decision-support tool rather than a replacement for human judgment.
TPG Asia senior adviser for digital operations Charles Allen said the firm has used AI to analyze thousands of employee feedback notes during a potential merger, helping investors identify cultural differences and build a more specific integration plan. “AI not only speeds us up, but also allows us to provide new perspectives on deals,” Allen said. TPG is also incorporating AI into underwriting as a potential lever for improving a company’s growth trajectory and has developed an internal AI tool that draws on historical investment experience to give deal teams a retrospective perspective, though it is not itself part of the decision-making process.
However, investors stressed that proprietary relationships and human judgment remain central. Xuan Ye, managing director at Collyer Capital, said AI adoption varies by firm size, with larger funds approaching the technology more systematically while smaller managers may use it on an individual basis. “AI is not going to bring in good deals,” Ye said, adding that sourcing remains based on human relationships and the ability to connect with founders and family businesses, especially in Southeast Asia. Basil Lui, founding partner and CEO of August Global Partners, said his firm uses an AI system to screen about 2,000 potential companies each night, but argued that PE/VC advantages come from private proprietary data gained through board meetings and relationships that AI cannot scrape.
Mahadevia acknowledged concerns that AI could erode India’s demographic dividend by disrupting IT services and BPO, but said the long-term growth story remains intact. He described Japan as “one of the hottest private equity markets in Asia,” driven by governance reforms and take-private opportunities, while noting global firms have struggled in China despite its size. The panel also cautioned that investors may overestimate AI’s earnings effect, with some companies showing negative returns on AI investments while overstating the technology’s potential.
