3 ways AI is rewriting the rules of private equity
For private equity firms looking to exit investments, the rules of M&A have changed. Successful exits now depend on three things: proving AI resilience,
running smarter sale processes and taking a more pragmatic approach to valuation.
Earlier this year, the sharp sell-off in software stocks, dubbed the “SaaSpocalypse”, exposed how quickly AI can reshape company valuations. Businesses that once commanded premium multiples are now being scrutinised by buyers who want to understand if their competitive advantage will survive the next wave of AI adoption.
Firms continue to face pressure to return capital to investors while the value of global private equity exits fell to $96bn in the first quarter of 2026, according to Preqin1.
1. AI has changed what buyers need to prove
Businesses can no longer rely on broad claims about productivity gains. Buyers want proof that a company has defensible advantages—whether proprietary data, trusted customer relationships, regulatory expertise or physical capabilities. They also want evidence that management is using AI to strengthen the business, not simply reacting to change.
As AI capability becomes increasingly commonplace, the businesses that stand out are those that can demonstrate how their use of AI creates genuine competitive differentiation.
Recent exits demonstrate how that thinking is shaping transactions. LDC’s sale of Building Cost Information Service was underpinned by its extensive proprietary construction data, while Graphite Capital’s exit of Beacon highlighted the integration of AI-assisted workflows into its life sciences platform.
2. AI has made buyers more selective
GPs are increasingly focusing on identifying the right buyers early, engaging them before a formal process begins and giving them the information they need to build conviction.
Bidders are less willing to commit time and resources to broad auction processes without confidence that an asset is worth pursuing. That is changing how successful sale processes are run.
They also want time with management teams to test how they are responding to AI-driven change, whether through investment in new capabilities, protecting proprietary assets or adapting their growth strategy.
LDC’s sale of Sedex Information Exchange illustrates the point. The process focused on a carefully selected group of buyers, supported by thorough preparation and early engagement. It created strong competitive tension while allowing the transaction to progress quickly through the later stages.
In an AI-driven market, buyers are looking for certainty. Early access to management teams is therefore becoming increasingly important in helping buyers build conviction.
3. AI has changed what businesses are worth
Infrastructure services, engineering and other asset-backed sectors have become increasingly appealing because they combine stable earnings with capabilities that are difficult to automate. Recent transactions involving businesses such as Senior, GMC Group and Ashcourt Group reflect this trend.
High-quality software and data businesses continue to command attention where they can demonstrate clear differentiation.
Recent exits, including Geomatik to Axcel and TradingHub to Nordic Capital, show that buyers remain willing to pay for businesses with strong competitive positioning and a compelling AI proposition.
Conclusion: The importance of relationships
Operating in this market requires a relationship-led approach to dealmaking. At Investec, we work with funds and portfolio businesses throughout their lifecycle. We continue to adapt how deals are prepared, marketed and valued as the AI landscape evolves.
The firms achieving successful exits are not waiting for conditions to improve. They are tailoring their approach to the market that exists today, building credible AI investment cases, targeting the right buyers and prioritising certainty of execution.
Value lies in identifying the right outcome, not just completing a deal.