PE-backed Retailers Risk Lower Exit Values By Renting AI Tools

The Common Question

Should our portfolio company build or buy AI before we exit?

The Lesson in This Case

PE-backed retailers and distributors that build proprietary AI infrastructure rather than subscribing to third-party tools are positioning for materially higher exit multiples – because owned models become defensible IP that acquirers price into valuations, while rented tools disappear from the balance sheet at close. The distinction turns on data control: companies that train models on their own operational and customer data create compounding advantages that SaaS-based competitors simply cannot replicate. Senior leaders evaluating AI spend should treat the build-versus-buy decision as an M&A question first and a technology question second.

Originally reported by Forbes. Read the full story here.