The AI revolution: Can middle-market businesses afford to fall behind?

Artificial intelligence (AI) is reshaping the business world, with tech giants like Google and Microsoft leading the charge. Yet, many middle-market companies have been slower to adopt AI, raising a crucial question: can they afford to fall behind? AI offers opportunities to automate tasks, enhance customer experiences, and improve decision-making. Ahead of SuperReturn North America, Frank Steinherr, Partner & Global Co-Head of Private Equity Practice Group, McDermott Will & Emery, looks at key areas where AI can drive efficiency and innovation for these companies.

Yet again, we are standing at the precipice of a revolution. AI is well on its way toward transforming the ways we work and live. While rapid change in any arena gives rise to numerous issues, one AI-related question potentially outweighs them all: Can middle-market businesses afford to fall behind the competition?

Some of today’s tech giants—Google, Microsoft, and other large, data-rich companies—already employ AI to refine their business models, improve processes, and optimize outcomes. Other "non-tech but tech-savvy" organizations are drawing on homegrown and acquired AI technologies to handle a range of functions, from cybersecurity and customer service to operational planning and logistics.

Despite several open questions about the technology itself and how it can best be monetized, AI start-ups with big ideas are attracting significant dollars (and earning hefty valuations) to develop innovations in healthcare, media, retail, finance, and more.

However, many middle-market businesses have been slower to adapt and apply AI to their operations. Available data reinforces that AI is beneficial. Middle-market companies with a clear, comprehensive digital vision that embraces AI tend to grow meaningfully faster than businesses without such vision. The challenge for businesses just beginning to explore AI lies in determining the best use case for investment.