AI in the base case

AI is entering a phase where its economic impact matters more than its technical novelty. As Vivek Sharma, Senior Advisor for AI Innovation at Advent, describes it, “we’re roughly where the internet was in 1999.” The core building blocks are in place, but the real shift has not yet fully played out.

Compute, storage, and increasingly capable models already exist. What matters next is not the technology itself, but how businesses apply it. As Vivek puts it, “the real value will come from the business applications built on top.”

A new wave of adoption

One defining feature of the current AI cycle is the absence of a distribution problem. “Billions of people are already connected. Established companies already have the data, customer relationships, and balance sheets needed to move quickly,” Vivek notes.

This dynamic sets the current wave apart from earlier technology shifts. Rather than disruption coming primarily from new entrants, many incumbents are positioned to act first. Vivek describes it as “a rare disruption where the established players start ahead.”

For management teams, this changes how AI should be treated inside the organization. “Every part of the value-creation plan—growth, cost, product, M&A—should now have an AI component,” Vivek says. The obstacle is rarely awareness. More often, it is conviction. Too frequently, AI is framed as upside rather than something to underwrite in the base case.

Private equity’s execution advantage

That emphasis on conviction and execution aligns closely with the private equity ownership model. As Vivek explains, “AI rewards the same qualities that define great private equity ownership: speed, clarity on value, and decisive execution.”

In a private equity context, this means treating AI as a core underlying value creation driver rather than an optional initiative. Clear theses, defined operating levers, and disciplined execution allow AI to be deployed in ways that directly support growth throughout the ownership period.

Evolution of work

When asked about the evolution of the workplace, Vivek frames it simply: “Every industry can be broken into two columns of tasks: those done by labor and those done by capital or technology.” With each major innovation, some cognitive work shifts toward the capital column as algorithms take on more responsibility.

That shift does not eliminate the role of people. “Humans are ingenious and creative—we move up the curve,” Vivek says. Each wave of technology creates space for new kinds of work, particularly in areas where judgment, creativity, and context remain essential.

Overall, Vivek’s perspective is about treating AI as a core operating capability. For private equity backed businesses, the opportunity lies in underwriting AI into the base case and applying it with the same discipline used across every other part of the ownership and value-creation process.