Private Market Insights

🤖 How Emerging Fund Managers Can Leverage ChatGPT and Generative AI

Per Crunchbase: The meteoric rise and adoption of ChatGPT cannot be overstated; by 2025 an estimated 10% of all global data will be produced by AI. With the widespread adoption of these tools, we’re starting to see generative AI enter the financial markets, the most notable in recent memory being BloombergGPT.

For emerging fund managers, these tools introduce a powerful way to improve their daily workflows and automate the more tedious parts of their jobs. Allowing them to re-capture some of their time and re-invest it into their portfolio.

🥤 PomJuice’s Key Takeaways

🕰️ Past

Historically, the adoption of generative AI in finance was gaining some momentum, but a lack of accessible tools and more importantly, trust, prevented mainstream adoption. Most firms only implement AI when creating financial models, often done by an experienced data analyst or data scientist. Not by the GPs, admin, or platform/ops teams.

🔎 Present

The release of ChatGPT and the subsequent popularity of similar tools has leveled the playing field, allowing fund managers access to powerful tools with very little overhead. We now see VC firms primarily using these tools for content marketing, allowing funds with more limited manpower to increase their presence on platforms like LinkedIn and Twitter. Some firms are taking things a step further by introducing generative AI into their due diligence and portfolio management processes as well. However, this is still an emerging use case.

🔮 Future

The future of generative AI in VC remains uncertain, but it holds potential benefits for fund managers who leverage its capabilities alongside their expertise. Continued development of generative AI may lead to enhanced decision-making processes and productivity gains. Allowing for the growth of $100M+ funds managed by only a skeleton crew of talented investors and analysts. However, challenges such as regulatory compliance and managing market disruptions need to be addressed to realize these potential benefits fully.

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