Key insights
- Bain Capital's David Gross warns CEOs are misapplying AI by focusing on technology rollout rather than business objectives. He highlights AI's potential for automating knowledge-intensive tasks and improving productivity, but also points out the shortage of talent to translate AI capabilities into operational changes. This could lead to slower-than-expected adoption and impact on company earnings in the short term.
Investing.com -- Artificial intelligence is being misapplied by executives who treat it as a technology rollout rather than a fundamental rethink of how businesses operate, Bain Capital Managing Partner David Gross said in a Bloomberg TV interview.
"We are extremely excited about it and also daunted by it, given the rapid pace of change," Gross said.
The biggest mistake CEOs can make is beginning with the technology rather than the business objective, he said. "People are so fascinated by the technology, that it's so easy to use that you start using it, then you say I need to change this and I need to change that," Gross said. Instead, companies should start with the business objective and then determine how the technology enables it.
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Much of AI's near-term impact lies in automating knowledge-intensive, data-heavy tasks, pushing companies to rethink how talent is deployed rather than simply adding headcount. "It has tremendous productivity potential," Gross said. "The default answer when faced with growth is not always now to add people; it is to actually think the process and where technology and people can be deployed in an intertwined way to really drive the value."
A shortage of talent capable of translating AI's raw capabilities into operational change is emerging as a key bottleneck to adoption, Gross said. Private equity and private capital firms are increasingly positioned to help close that gap by pairing capital with execution. "They have an important seat at the table and can drive transformative change," he said.
Gross also pointed to the broadening of private markets as a structural trend, as individual investors push for access to long-term assets historically reserved for institutions. But expanding access brings new risks, particularly around expectations for liquidity. "There's an assumption that liquidity will always be available—but what does liquidity really mean?" Gross said.
IPO markets have become less reliable amid elevated volatility, making listings harder to time and less attractive, Gross said. In their place, sovereign wealth funds and pension funds are playing a larger role as providers of capital and liquidity.
Gross said deal activity "in the first half has been solid," though geopolitical events could interfere with the outlook.