The sequencing mistake most PE firms make with AI programs. And the 90-day internal win that changes the calculus.
Blake Aber · Predicate Ventures · 2026
The pattern I keep watching: a PE firm announces an AI initiative for its portfolio companies. The announcement is LP-facing. The initiative is visible. The firm looks like it's ahead of the curve.
Eighteen months later, the portfolio companies are still running pilots. The AI initiative is still being announced. The GP team has spent considerable time running workshops and writing frameworks. Portco results have been uneven.
The problem isn't that the firm was wrong about AI. It's that the sequence was wrong.
Why firms start with portfolio AI
The LP optics pull strongly toward portco visibility. AI transformation at the portfolio level is a thing you can describe in a fund letter. It sounds like value creation. It's what other GPs are talking about at conferences.
Internal AI (AI that makes the GP team's work better) is invisible from the outside. No LP ever asked a GP: "How much faster are you doing due diligence now that you've automated memo synthesis?" The incentive to publicize what's visible outweighs the incentive to build what's useful.
So firms start with portfolio AI. The GP team hires a "Head of AI" or brings in consultants. The portcos get workshops. Some pilots run. Some don't.
The problem with portfolio AI first
Here's what the firms that sequence this way discover at around year two: they're trying to provide AI support to portfolio companies without having built the AI muscle internally.
When a portco CTO calls to ask for advice on eval harness design, the GP team doesn't have a practiced answer. They haven't built an eval harness themselves, so they can't speak to why from lived experience.
The question worth asking
What is the internal AI your GP team runs on today?
Not what you've recommended to portcos. Not what you've told LPs. What is the AI that your analysts and partners actually use, every week, to do their jobs faster and better?
If the answer is vague, that's where the AI program actually starts.
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