00:00Blackstone and KKR are in talks with Alphabet to give the companies that they own access to Google's artificial intelligence
00:06models.
00:06This is according to people familiar with the matter.
00:09And of course, this comes as OpenAI and Anthropic are each partnering with alternative asset managers to form what they're
00:15calling AI consultancies for clients.
00:18Allison Neely covers private equity for Bloomberg, and she broke this story.
00:21So can you give us examples of how this would work?
00:24So essentially, there's kind of two different approaches.
00:26One would be sort of what OpenAI and Anthropic are doing, where they're sort of making a consulting firm of
00:32sorts, teaming up with private equity firms to do that.
00:35And that's to encourage companies to adopt artificial intelligence.
00:38We also have what, you know, Alphabet is talking to Blackstone, KKR, and others about, which is sort of a
00:44deal, if you will, to implement their artificial intelligence within those firms and within the portfolio companies.
00:51Why now? Why are PE firms moving urgently now to encourage their portfolio companies to adopt AI after what feels
00:57like several years of, oh, let's wait and see how things go?
01:00I mean, I think it's sort of a sense that AI is moving very quickly and that certainly there are
01:07certain companies within the portfolio, software companies, of course, which could potentially be under threat from artificial intelligence.
01:13So I think there's a sense in the private equity community broadly that, you know, they need to start striking
01:19some of these deals, start putting this technology to work, and sort of throw things at the wall almost and
01:24see what sticks and see what works for them.
01:26What do we know about the potential structure of these partnerships that the Blackstones and KKRs are putting together?
01:32Are they like JVs? Are they just kind of multi-year contracts?
01:36They're a bit different.
01:37So the OpenAI and Anthropic, they're sort of talking about starting actual companies.
01:41Got it.
01:42What we've heard from sources about the alphabet talks is that is more like actually striking deals to use the
01:48technology, a little bit more contract-based, I guess, if you will.
01:51The other thing that's worth noting is all of these private equity firms are already using AI within the firms,
01:57within the portfolio companies.
01:59I covered KKR earnings yesterday, and they said that they are using AI at more than 150 portfolio companies already.
02:05So they're all looking at adopting all sorts of different models, all sorts of different technology.
02:09They're all looking at adopting all sorts of different types of technology.
02:10They're all looking at adopting all sorts of different types of technology.
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