Build or buy? Choosing Between Custom AI Models and Off-the-Shelf Platforms –
Sept 11, 2025
As artificial intelligence becomes central to private equity, firms are asking a critical question: should they build custom AI models or buy off-the-shelf platforms? Each option offers clear advantages—and trade-offs. Building in-house allows firms to tailor solutions around proprietary deal data and portfolio strategies, potentially creating a powerful competitive edge. On the other hand, buying ready-made platforms offers speed, proven reliability, and lighter internal demands. The decision isn’t just about technology—it’s about aligning AI adoption with a firm’s investment philosophy, resources, and long-term value creation goals.
| Option | Pros | Cons |
|---|---|---|
| Build Custom AI Models |
• Tailored to strategy: built around proprietary deal data, sector focus, and portfolio needs. • Competitive edge: unique insights differentiate firms. • Data control: sensitive info stays internal. |
• High cost & time: requires heavy investment in infrastructure and talent. • Specialized expertise: needs ongoing data science & engineering support. • Slower adoption: months before value is realized. |
| Buy Off-the-Shelf Platforms |
• Speed to value: tools like iLEVEL, Allvue, or Grata deliver immediate functionality. • Proven solutions: workflows and integrations already tested. • Lower internal burden: less need for in-house AI teams. |
• Limited customization: firms may need to adapt to vendor workflows. • Vendor dependency: updates and data handling controlled externally. • Competitive parity: rivals can use the same tools. |
Decision Checklist
- Choose Build if: You have proprietary data, strong internal talent, and a need for differentiated insights.
- Choose Buy if: Speed, ease of deployment, and proven workflows are your priorities.
- Choose Hybrid if: You want rapid adoption today, while layering custom AI on top of vendor infrastructure for long-term advantage.
Firms must weigh speed versus uniqueness. Build when differentiation and proprietary insights are strategic priorities. Buy when speed and efficiency matter most. Increasingly, the smartest firms combine both—buying proven platforms and layering custom AI models on top for a best-of-both-worlds approach.