Instead of selling software to traditional industries, a more defensible approach is to build vertically integrated companies. This involves acquiring or starting a business in a non-sexy industry (e.g., a law firm, hospital) and rebuilding its entire operational stack with AI at its core, something a pure software vendor cannot do.

The current decade presents a massive opportunity for private equity. By acquiring capital-intensive, technologically stagnant businesses like old power plants or manufacturing facilities, firms can inject AI and robotics to dramatically boost efficiency and create autonomous assets, generating huge returns.

The reported Anthropic-Blackstone JV signals a larger private equity strategy. PE firms aren't just using AI for cost-cutting within portfolio companies; they're leveraging it as a tool to identify and consolidate struggling SaaS businesses, capitalizing on the "SaaSpocalypse" to buy distressed assets.

Private Equity value creation has evolved. In the 2000s, it was driven by leverage; in the 2010s, by digital transformation. Today, AI serves as the new foundational "operating system" for growth, embedding intelligence into every process, contract, and customer touchpoint to drive returns.

A new startup strategy involves acquiring traditional businesses and dramatically increasing their margins by integrating AI. This approach requires a unique blend of M&A, operational change management, and AI expertise, differing from typical venture-backed company creation.

Expect more acquisitions of VC firms by large asset managers. The strategic driver isn't just AUM, but the ability to apply cutting-edge AI and tech from the VC portfolio to accelerate growth and EBITDA in their traditional private equity-owned industrial and consumer companies.

Instead of being disrupted by new 'AI-native' PE firms, incumbents like Bain Capital and TPG are forming a joint venture directly with OpenAI. This creates a dedicated 'deployment arm' of forward-deployed engineers to embed AI solutions across their vast portfolio of companies, accelerating enterprise adoption at scale.

The strategy of acquiring incumbent companies to accelerate AI adoption is creating a new investment category. Unlike private equity, which optimizes existing assets for efficiency, this new class focuses on fundamentally transforming them into something entirely new.

Instead of new "AI-native" PE firms emerging, established players like TPG and Bain are forming joint ventures with OpenAI. They plan to embed "forward deployed engineers" to scale AI adoption across their portfolios, suggesting a model of direct partnership over building in-house expertise.