Private equity is ramping up its AI adoption efforts, with Blackstone acquiring key executives to oversee how AI is applied across its portfolio of about 230 companies.
Prakhar Mehrotra joined the private equity giant on Monday, according to information from Business Insider. Matthew Katz, Blackstone's global head of data science, told Business Insider in a written statement that Mehrotra will lead Applied AI within Blackstone's data science team. Mehrotra comes to Wall Street from Walmart, where he led the retailer's applied AI efforts and managed a team of more than 400 data scientists.
“Blackstone's unparalleled scale and industry breadth presents an exciting challenge to create a blueprint for successfully integrating AI across a variety of sectors,” Mehrotra said in a written statement to BI. said in a statement. “By working closely with these companies and leveraging my expertise, we can unlock the transformative power of AI by driving innovation, efficiency, and growth.”
While at Walmart, Mr. Mehrotra served as Vice President of Applied AI, where he led a team responsible for how AI was integrated into merchandising, including assortment, pricing, and inventory management. In 2023, Mr. Mehrotra led the team that updated the retail giant's trucking routes to save energy and costs, and he won the INFORMS Franz Edelman Prize. He also drove strategy for Walmart's generative AI strategy. Prior to that, Mr. Mehrotra worked as a data scientist at Uber and X (previously he was known as Twitter). He holds a PhD in aeronautical engineering from the California Institute of Technology.
Blackstone, like its peers, is passionate about leveraging AI to transform businesses in nearly every industry. Blackstone, which is worth $1 trillion, holds vast holdings in everything from real estate to media brand Hello Sunshine and skin care company Supergoop. This also provides access to large amounts of data that are the basis for the accuracy of AI models. But Katz cited a survey of portfolio company leaders at Blackstone's CEO Conference last month, saying talent needs are “the single biggest barrier to our businesses taking advantage of the benefits from AI.” He said it was identified as.
The AI craze is creating new demand for engineers who specialize in the technology, from deep learning experts to engineers versed in natural language processing. PE firms in particular are “strongly looking” to hire AI leaders who can deploy technology across portfolio companies, Deepali Vyas, global head of fintech and applied intelligence at Korn Ferry, recently told BI. . He said some mid-sized and larger PE firms are offering salary packages of up to $2 million.
Zac Maufe, head of Google Cloud's financial services business, told BI: “As I speak to you, we don't have enough of the right people to make these changes happen quickly and at scale. ” he told BI. “This is a question we hear all the time from our customers.”
PE firms are increasingly turning to technology to increase the selling price of assets upon exit. Manoj Mahenthiran, PwC's PE leader, previously told BI that with many deals being done between PE firms, traditional strategies such as reducing headcount and leveraging debt are no longer as effective as they used to be. Told. Some companies have turned to the public cloud to accelerate growth and reduce costs. In one case, Boston-based buyout firm Thomas H. Lee reduced the cost of a portfolio company's technology infrastructure by 50% by migrating to the cloud.
Blackstone has a track record of investing in the technology resources of its portfolio companies. The company has built a tool on its public cloud that sends internal data from its portfolio companies back to Blackstone. The tool, called Data Direct, helped Blackstone investors stay up-to-date on portfolio companies in real time, giving them a better understanding of the market and Blackstone's deal pipeline. .