Artificial intelligence adoption is being shaped by a common and consequential error: executives often begin with the technology itself instead of the business outcome it should serve, Bain Capital Managing Partner David Gross said in a television interview.
"We are extremely excited about it and also daunted by it, given the rapid pace of change," Gross said, capturing both the enthusiasm and unease corporate leaders feel as AI capabilities advance.
Gross argued that the gravest mistake CEOs can make is to lead with the tech. "People are so fascinated by the technology, that it's so easy to use that you start using it, then you say I need to change this and I need to change that," he said. That impulse, he said, can invert the right approach: firms should define the business objective first and then determine how the technology enables it.
The practical implications, according to Gross, are concentrated in areas that rely on knowledge work and heavy data processing. In the near term, much of AI's impact will come from automating such tasks and prompting companies to rethink how they deploy talent rather than simply adding headcount.
"It has tremendous productivity potential," Gross said. He emphasized that the reflexive response to growth - hiring more people - should no longer be automatic. "The default answer when faced with growth is not always now to add people; it is to actually think the process and where technology and people can be deployed in an intertwined way to really drive the value."
That intertwined deployment, however, confronts a clear bottleneck: a shortage of people who can translate raw AI capabilities into operational change. Gross said this scarcity of talent is emerging as a key constraint on adoption, limiting companies' ability to convert technical capability into business results.
Private equity and private capital firms, Gross said, are increasingly positioned to help address that execution gap by pairing investment with operational expertise. "They have an important seat at the table and can drive transformative change," he said, pointing to the role these firms can play beyond merely supplying capital.
Gross also discussed structural shifts in private markets. He noted a broadening trend in which individual investors seek access to long-term assets that were traditionally reserved for institutional investors. While that expansion increases investor reach, it also introduces new risks, "particularly around expectations for liquidity," he said.
"There's an assumption that liquidity will always be available - but what does liquidity really mean?" Gross asked, signaling concern that retail access to illiquid, long-term assets may come with mismatched expectations.
Turning to public markets, Gross said IPO markets have become less reliable amid elevated volatility, which has made public listings harder to time and less attractive for some issuers. As a consequence, sovereign wealth funds and pension funds are taking on a larger role as steady providers of capital and liquidity.
On transaction activity, Gross described deal flow in the first half of the year as "solid," but he added a note of caution that geopolitical events could disrupt the outlook going forward.
- Takeaway: Start AI initiatives from business objectives, not the technology; rethink talent allocation and leverage private capital for execution.
- Market impact: Private markets, pension funds, and sovereign wealth funds are playing larger roles as IPOs become less dependable.