Generative AI tools can accelerate fundraising, deal sourcing, and due diligence – Robin AI

February 4, 2025 (Preqin News) – A tougher deal-making environment means increased competition for premium assets. Platforms powered by artificial intelligence (AI) can assist in deal-making by logging and tracking relationships, deal intelligence, and using third-party information, according to legal documentation company Robin AI’s AI in Private Markets 2025 report.

The use case for generative AI (genAI) is at a tipping point in private markets, according to Frederik Muelke, Head of Alternative Assets at Robin AI, who said these tools have the potential to accelerate fundraising, deal sourcing, and due diligence timelines.

‘I think 2024 was the year of AI exploration, and 2025 is the year of adoption,’ Muelke told Preqin News.

However, concerns remain over privacy, hallucinations, and biases. Keeping a ‘human in the loop’ by reviewing and approving output addresses these key issues. The best answer from a genAI model is when you ask it a question the answer to which was part of the training data set, because hallucinations happens when you ask questions where the answer isn’t in the data that the model has access to,’ Muelke said.

Muelke explains that as the answers to the questions are in the contracts the risk of hallucinations is mitigated. 'On top of that you fold in citations, enabling the human in the loop, who checks the automated output to make sure that they can seamlessly verify what answers the model has given.’

Private capital GPs are planning to or already expanding their use of AI tools across the investment, finance, and legal sectors.

Nearly half of private equity CEOs (46%) expect genAI to be integrated to a large or very large extent into their firm’s business processes and workflows over the next three years, according to PwC’s recent CEO survey. This compares to a global average across sectors of 41%.

DeepSeek’s genAI chatbot, launched last week, spooked public markets, wiping over $500bn off US chipmaker Nvidia’s market value. While DeepSeek’s demonstration that effective AI can be trained and developed on a small budget may be bad news for investors in some AI companies, it is likely to be positive for users.

At the application layer, where Robin AI sits, broader competition between foundational models means these products can become cheaper. DeekSeek’s new model means that Robin AI’s legal model can be more readily available, according to Muelke.

‘We can make this much more readily available to a wider range of segments in the market and offer it to people who would all benefit very much from the intelligence and products. The DeepSeek news is essentially just another proof point that the democratization of access to legal expertise will benefit from these developments,’ Muelke said.

Robin AI is a AI start-up launched in 2019. It has raised over $50mn in series B and B+ fundraising over the past 12 months. It uses Anthropic’s ‘Claude’ AI as its foundational model.

_{The opinions and facts included within the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin providing the information in this content accepts no liability for any decisions taken in relation to the above.}