How AI Will Make Private Equity Firms Grow Faster

by John T. Battaglia, President & Chief Technology Officer, Judge Consulting & Government Services

February 10, 2026

There’s a growing narrative in the market that private equity (PE) is losing its edge, with slowing exits, tighter capital, increased scrutiny, and more competition. But from where I sit, working directly with private equity firms and their portfolio companies every day, that story misses what’s truly happening. Private equity isn’t losing its advantage. It’s being redefined by AI, execution speed, and collaboration.

At Judge Consulting Group, we see this transformation up close. The most successful PE firms are not waiting for market conditions to improve. They are fundamentally changing how they operate, how they partner, and how they create value.

And AI is the catalyst forcing that change.

The Old Playbook Is No Longer Enough

For years, outperformance relied heavily on tight capital, financial engineering, multiple expansion, and aggressive cost reduction. That model worked exceptionally well in a low-rate, high-liquidity environment. Today, those levers are weaker, slower, and more unpredictable. The firms still relying on them are finding that returns are harder to manufacture. The firms pulling ahead are doing something different. They are shifting from financial optimization to operational acceleration, and AI is becoming the engine.

AI Has Changed the Competitive Clock

AI doesn’t just improve productivity. It compresses time.

What used to take 12 months now takes 3, and what used to take 6 months now takes 6 weeks. Entire operating model redesigns are happening inside a single investment cycle.

That reality is forcing firms to rethink how quickly they must:

Modernize portfolio companies

Create visibility across fragmented systems

Integrate acquisitions

Build data platforms

Enable revenue growth

Optimize operations

Speed is no longer a nice-to-have. It is the differentiator. And this is where a major shift is occurring.

PE Firms Are Forming Joint Ventures At Record Levels

One of the clearest trends we see at Judge Consulting Group is that private equity firms are increasingly joining forces instead of trying to build everything internally. Not for capital reasons alone, but for capability acceleration.

No single firm can realistically build world-class capability across all the necessary areas fast enough on its own. So, they are forming joint ventures and strategic partnerships where each firm brings a distinct area of expertise, such as industry specialization, operational rigor, technology and AI execution, and scale. Together, they move faster than any could alone. This isn’t weakness. It’s strategic maturity.

AI Adoption Requires Deep Expertise Across:

Data architecture

Cloud platforms

Process automation

Application modernization

Change management

Industry-specific workflows

The New Private Equity Advantage: Execution Velocity

Capital is no longer scarce, capability is. The firms winning today are those that can:

Deploy AI across portfolios quickly

Standardize data and reporting within months, not years

Integrate acquisitions without stalling growth

Automate back-office operations to free up management bandwidth

Use predictive analytics to guide commercial strategy

Reduce dependency on manual processes and tribal knowledge

We see PE firms designing “portfolio platforms” powered by AI, with shared operating models that allow new acquisitions to plug in rapidly. This creates faster onboarding, insights, decisions, and growth. AI doesn’t just improve margins. It accelerates the entire investment lifecycle.

What This Means for Portfolio Companies

For management teams, this shift is massive. AI-enabled PE ownership increasingly means more transparency, more data-driven decisions, higher expectations for execution, less tolerance for slow transformation, and more support through shared platforms and partners.

The best firms are not simply pushing cost reduction; they are funding modernization. They are embedding operators. They are bringing technology to the table on day one. That creates stronger companies, not just better exit multiples.

The PE Firms That Will Dominate the Next Decade

The industry is moving from “How do we structure the deal?” to “How fast can we transform the business?” That is a profound change.

The next generation of PE leaders will be defined by:

Efficiency over Financial Optics

AI Adoption over Legacy Tooling

Ecosystems over Closed Models

Execution Speed over Deal Volume

Capability over Leverage

The Bottom Line

Private equity isn’t becoming weaker. It’s becoming more sophisticated. AI is forcing firms to evolve from capital allocators into transformation engines. From isolated competitors into collaborative ecosystems, and from financial engineers into operators at scale.

At Judge Consulting Group, we see this shift every day. And we’re helping PE firms and portfolio leaders build the AI-driven platforms, operating models, and execution capabilities required to grow faster in a market that no longer rewards waiting.

Contact Us To Learn More

Judge Consulting Group partners with private equity firms and portfolio leaders to accelerate transformation through faster integrations, smarter operations, and AI‑driven growth.