At a time when no conversation is complete without mentioning the word “AI”, temptations to present themselves as companies leading in the space have never been severe, especially from the side of startups. But what about those who are putting money behind these ventures; are they equipped enough to cut through the AI (artificial intelligence) washing and identify those upstarts which will stand the test of time? Have they done any up-skilling themselves especially when the rate of success is hugely dependent on technical understanding? How are the generalist fund managers who are experiencing FOMO (fear of missing out) in the midst of the AI tsunami taking critical investment decisions ? Are these investors who are well equipped at financial engineering willing to reinvent themselves as tech investing mavens?

We speak with private equity veteran Rahul Bhasin, managing partner of Baring Partners Private Equity, managing upwards of a billion dollars in assets under management. Bhasin underwent a course at the Massachusetts Institute of Technology (MIT) to gain a deeper understanding of new-age technologies like generative AI and to build a fundamental understanding of the same. Edited excerpts from the interview below:

How has your thesis around AI evolved in the past 18 months, especially as open-source models become increasingly competitive with proprietary ones?

Over the past 18 months, our thesis has shifted from focusing solely on model supremacy to understanding deployment context, data moats, and vertical differentiation. The rise of open-source models has commoditized core capabilities, so we now look for startups that can create........

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