AI transformation in private equity: James Salmon in conversation with Ben Legg

James Salmon, Head of Financial Sponsors at Shawbrook, and Ben Legg, former COO of Google Europe and three-time private equity-backed tech CEO, discuss how AI is reshaping the private equity landscape and the questions boards and management teams should be asking as the technology becomes more embedded in business operations.

James Salmon: AI is now a regular boardroom topic, but the discussion can still feel abstract. What has changed most in the past year?

Ben Legg: The shift is from experimentation to thinking about how AI can support whole workflows. Many people began by using AI as a more sophisticated search or drafting tool. The next step is helping a business complete more of an end to end task, while keeping the right human oversight. That is where the change becomes real.

James: So having access to technology is not, by itself, an advantage?

Ben: No. Access will become increasingly common. The differentiator will be the leadership team’s ability to understand where AI can make a difference and then deploy it effectively. That means choosing the right problems, giving people clear tools and guardrails, and learning what works. AI can make strong people more effective, but it is not a substitute for thinking.

James: How should investors think about AI during diligence and ownership?

Ben: It should be both an opportunity and a risk question. Investors should ask where AI could improve the company’s economics or customer proposition, but also where an AI-enabled competitor could change the market. During ownership, it belongs in the value creation plan and in regular board discussions. The answer will be different for every business, which is why the work has to be grounded in the company’s strategy rather than a generic technology roadmap.

James: If you were speaking to a private equity board, where would you suggest starting?

Ben: Start with an ambition: what should the business be able to do differently in two years? Then look at the data and the operating model. Identify three to five priorities with clear potential value, rather than trying to apply AI everywhere, and revisit those priorities regularly as technology and the business develop.

James: What does that mean in practice for a management team?

Ben: It means moving beyond a general instruction to “use AI”. A good programme has ownership, a clear business case and a practical view of how success will be measured. It also has a data strategy and governance. Leaders need to be comfortable with the questions: which information can be used, which decisions need human accountability, and how do we make sure people have safe tools rather than finding unapproved routes themselves?

James: Do smaller businesses face a different challenge from larger companies?

Ben: They may not have the same resource to invest in technology, change management and specialist support. But they can often move with more speed once the leadership team is aligned. The important thing is not to copy a large organisation’s transformation programme. It is to focus on the few applications that are genuinely material for that business and execute them well.

James: There is concern about the effect of AI on jobs. How do you see that developing?

Ben: Roles and skills will change, and businesses need to prepare for that. But history suggests that when technology makes an activity faster and less costly, demand can also increase. The more useful focus is on helping people build the skills to work effectively with AI: learning quickly, using judgement and asking better questions. Those capabilities will become more valuable, not less.

James: What should leaders do to build that capability now?

Ben: They should become active learners themselves. Senior teams set the tone. When leaders understand the technology well enough to use it and challenge it, the whole organisation has a clearer signal that learning matters. Giving people practical examples, structured time to build confidence and permission to test ideas can make a substantial difference.

James: What would you leave private equity boards with?

Ben: Treat AI as a strategic operating question, not a side project. Set the ambition, create the right foundations, choose a small number of priorities and bring people with you. Businesses that do that well could be meaningfully ahead of their markets over the next few years.

James concludes: The message for investors is clear: AI will not deliver value on its own. But, with focused leadership, good governance and a clear commercial purpose, it can become an important part of the value creation agenda.

Thank you to Ben Legg for his time. For more on our work with financial sponsors, visit shawbrook.co.uk/business/financial-sponsors