PE firms deploy AI teams to transform portfolio companies
Private equity firms are increasingly embedding artificial intelligence specialists within portfolio companies as sponsors look to use the technology to develop new products, improve operations and create additional sources of revenue, according to a report by the Wall Street Journal.
Private equity firms are incorporating artificial intelligence teams within portfolio companies, as sponsors aim to leverage the technology for new product development, operations enhancement, and revenue generation, according to a Wall Street Journal report. Blackstone and Hellman & Friedman have partnered with Anthropic to establish a 160-strong AI engineering operation, initially supporting the firms' owned companies.
This effort is part of a $1.5bn joint venture involving Anthropic and several Wall Street investors such as Apollo, General Atlantic, and Goldman Sachs. Each entity is contributing around $300m to the venture, operating under the standalone business called Ode.
Initially, Ode aims to provide AI implementation services to private equity sector companies, with plans to expand services to other corporate clients. Blackstone's global head of operating team, Rodney Zemmel, highlighted the attraction of the venture's senior engineering expertise. Blackstone plans to roll out Ode across 25 of its 270+ portfolio companies, with engineers already assisting six businesses, including Chamberlain Group.
At Chamberlain, Ode specialists contribute to an 18-person engineering team at the company's Illinois headquarters, working on software features to enhance customer relationships and increase the deployment of connected cameras.
The venture's commercial potential has altered Chamberlain's expectations for its digital-access operation, which is projected to generate approximately $500m in annual revenue by 2030, up from $100m in 2025. AI also contributes to reducing operating expenses, as evidenced by a reduction in advertising costs for Chamberlain's smart-access products during Amazon's Prime Day.
Private equity executives involved in the initiative emphasize revenue generation as a primary objective, rather than cost reduction or workforce downsizing. At Citrin Cooperman, a Blackstone-backed professional services firm, Ode engineers are creating a portal to improve interactions between accountants, financial advisers, and their clients.
Hellman & Friedman has started deploying Ode's platform at Baker Tilly, one of its portfolio companies, to address daily processes and identify opportunities for AI integration. Ode acquired AI services startup Fractional AI in May, absorbing most of the startup's AI engineers into the new venture. Other financial firms are also pursuing similar opportunities, with OpenAI establishing a competing AI services venture backed by a $4bn investment from private equity firm TPG.
For Ode, the private equity portfolios of Blackstone and Hellman & Friedman serve as an initial pool of potential customers and test environments before the venture's broader corporate market expansion. Ode CEO Chris Taylor stated that demand from both private equity-backed and independent companies continues to grow.
Written by urgent.news from Private Equity Wire's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
