Year-over-year data reveals accelerating adoption and a sharp rise in AI-driven competitiveness across global GPs and LPs

BOSTON--(BUSINESS WIRE)--

Dynamo Software:

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Quick Take

When: November 6, 2025

Where: Boston, Massachusetts

Who: Dynamo Software, a global provider of alternative-investment software and intelligence

What: Release of the 2nd annual Dynamo Frontline Insight Report: An Inside Look at AI Trends & Future Plans within the Private Investment Community

Why: To track how AI adoption, perceived competitiveness and portfolio impact have evolved in the past 12 months

How: Through a global survey of GPs and LPs conducted in September and October 2025

AI Adoption Doubles Year Over Year

The latest Frontline Insight Report from Dynamo Software reveals a dramatic evolution in how the alternative investment (ALTS) community views and deploys AI across private markets. Skepticism has nearly vanished, replaced by broad recognition that AI is fundamental to competitiveness, even as its impact on returns remains mixed.

The survey found a nearly 10-point jump in firms incorporating AI into their processes, rising from 20% in 2024 to 29% in 2025. The share of firms not using AI fell from nearly 13% to under 5%.

When asked to rate AI’s importance to maintaining a competitive edge, those citing it as highly important more than doubled, from 7% in 2024 to 18% in 2025. Not a single respondent dismissed AI’s significance this year.

Within the ALTS community, 40% said job displacement is likely or very likely due to AI, while 14% called it highly likely. Only 5% now see displacement as unlikely, down from 10% last year.

“Investors have stopped theorizing and started piloting,” said Dynamo CEO Hank Boughner. “The results speak for themselves — fund managers and asset allocators are seeing tangible benefits from their AI deployments. The momentum is undeniable. The dialogue has shifted from ‘Should we adopt AI?’ to ‘How can we maximize its impact?’”

Competitiveness Defines AI’s Emerging Value

Predictive use cases for AI, once expected to dominate, are now developing to include more operational and efficiency-focused applications. In 2025, 44% of respondents said they use AI for predictive analytics, down from 55% a year ago. Reliance on traditional analytical methods rose from 17% to 25%, signaling a refinement phase as firms identify where AI truly adds value.

“We’ve seen this before with other technologies,” said Boughner. “Early expectations give way to refinement as real value comes into view. Much like the internet's transformation from a source of information to a backbone of global infrastructure and economic development, AI’s impact will redefine how we live, work, and innovate—becoming an essential driver of progress across every industry and all aspects of our society.”

For GPs, competitive advantage increasingly depends on how quickly they can extract and act on insights buried in data and documentation. That may explain why document management rose from the fourth most common AI application in 2024 to the top use case in 2025. AI-enabled deal origination and analysis, which is core to uncovering new investment opportunities, advanced from third to second place this year.

AI Gains Traction Despite Uneven Returns

Even as use cases mature, measurable performance gains remain varied. Thirty-eight percent of firms report no portfolio-level impact yet, while 37% have seen slight (34%), moderate (11%), or significant (3%) improvements.

The leading barrier to further implementation remains data quality and availability, especially among GPs, underscoring how foundational clean, structured data is to unlocking AI’s potential. Meanwhile, cost and resource constraints have intensified, rising from the fourth most-cited challenge in 2024 to second in 2025.

Why It Matters

Private-market firms are moving beyond experimentation into enterprise-level AI deployment, shifting from “proof of concept” to “proof of competitiveness.” These findings align with broader industry trends showing alternative-investment managers investing in AI-driven infrastructure to accelerate diligence, strengthen transparency, and meet LP expectations for operational excellence.

Take a Deeper Dive into AI Trends

The complete Dynamo Frontline Insight Report provides expanded data on:

planned AI investment allocations

leadership of AI strategy inside firms

attitudes toward regulation and ESG applications

and more YoY data highlighting emerging AI in ALTS trends

Download the full report:

AI LP and GP Survey Findings 2025 | Alternative Investments | Dynamo

About Dynamo’s Frontline Insight Reports

Published quarterly, Dynamo’s Frontline Insight Reports contain primary research obtained through online surveys of targeted alternative investor audiences. The survey results are contextualized by Dynamo subject matter experts in formal Frontline research reports. To date, Dynamo’s research team has focused on delivering noteworthy insights related to the attitudes, predictions, and strategic plans that Limited Partners (LPs), General Partners (GPs), Hedge Funds, Emerging Managers, and Fund Accountants have on a number of alternative investment topics. To learn more about Dynamo’s research reports, visit the Resource Library or contact [email protected].

About Dynamo Software, Inc.

Dynamo gives alternatives investors a Performance Edge, empowering them to efficiently scale their firm to capitalize on the growing wave of private market opportunities. With the Dynamo Alternative Investment Platform, Limited and General Partners can now run a tightly integrated firm, putting all their data to work to accelerate operations across front, middle, and back office, unleashing teams to work smarter, and allowing leaders to make better investment decisions and scale their firm. Dynamo has a global footprint with operations across North America, EMEA, APAC, and UAE. For more information, please visit DynamoSoftware.com.

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Source: Dynamo Software