Boston, Massachusetts – November 6, 2025 – Dynamo Software, a global provider of alternative-investment software and intelligence, has released its second annual Frontline Insight Report, highlighting a significant increase in AI adoption within the private investment community and an evolving perspective on its strategic value and use cases.
The report, based on a global survey of General Partners (GPs) and Limited Partners (LPs) conducted in September and October 2025, indicates that AI adoption has nearly doubled year-over-year. The share of firms incorporating AI into their processes rose from 20% in 2024 to 29% in 2025, while the percentage of firms not using AI decreased from nearly 13% to under 5%. Additionally, the number of firms citing AI as highly important for competitive advantage more than doubled, from 7% in 2024 to 18% in 2025, with no respondents dismissing its significance this year.
Hank Boughner, CEO of Dynamo Software, commented on this trend, stating, “Investors have stopped theorizing and started piloting. 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?’”The study also reveals a shift in AI applications, with a decline in reliance on predictive use cases (from 55% in 2024 to 44% in 2025) and a rise in operational and efficiency-focused applications. Document management emerged as the top AI application, climbing from fourth place in 2024, followed by AI-enabled deal origination and analysis, which moved from third to second place.
Concerns about job displacement due to AI were noted, with 40% of the alternative investment community believing it is likely or very likely, and 14% considering it highly likely. Boughner drew a parallel, stating, “We’ve seen this before with other technologies. 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.”Despite the growing adoption and refinement of use cases, measurable performance gains remain varied. Thirty-eight percent of firms reported no portfolio-level impact yet, while 37% observed slight (34%), moderate (11%), or significant (3%) improvements. The primary barrier to further implementation continues to be data quality and availability, particularly among GPs, highlighting its foundational role. Concurrently, cost and resource constraints have intensified, becoming the second most-cited challenge, up from fourth in 2024.
These findings suggest that private-market firms are progressing beyond initial experimentation to enterprise-level AI deployment, moving from “proof of concept” to “proof of competitiveness.” This aligns with broader industry trends where alternative-investment managers are investing in AI-driven infrastructure to enhance diligence, improve transparency, and meet LP expectations for operational excellence.
The complete Dynamo Frontline Insight Report offers expanded data on planned AI investment allocations, leadership of AI strategy within firms, attitudes toward regulation and ESG applications, and year-over-year data detailing emerging AI trends in alternative investments.
Dynamo Software, Inc. provides the Dynamo Alternative Investment Platform, designed to empower limited and general partners to scale their firms efficiently, optimize operations across front, middle, and back office, and make informed investment decisions. The company maintains a global footprint with operations in North America, EMEA, APAC, and UAE.
