INSIGHTS, FLOWS & INVESTMENT TRENDS

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AI Is Not Human. Stop Describing It That Way.

We don’t say a dog “lied” or a cat “hates” the mouse it catches. We reserve those words for human intent.

With AI, that discipline has disappeared.

Executives, media, and users now describe models as if they understand, decide, and learn. They don’t. These systems generate outputs from statistical patterns in data—without context, perspective, or awareness. The language is convenient. It’s also wrong.  AI only operates based upon historical data.

The vocabulary isn’t semantics; it shapes how these systems are trusted and where they’re applied.

Human Terms used for AI:AI Is:
UnderstandsMatching patterns — no comprehension
DecidesSelecting probabilities — no judgment
KnowsReflecting training data — no verification
LearnsRunning on fixed weights — no update from interactions
LiedProducing a mistake — no intent

In investment workflows, it’s important to not be misled by the humanizing vocabulary and use AI for what it can do.   AI is highly effective when the task is bound, pattern-based and a calculation is the answer:

  • Screening large datasets
  • Identifying statistical anomalies
  • Structuring and extracting information

Humans are best and need to be relied upon where outcomes depend on judgment, context, experience, or what isn’t in the data.  

The decision—and the accountability—are still the responsibility of the human.

Listen to the Podcast to learn more

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Capital Provider Interest: Buyer demand remains strong for businesses generating approximately $5 million of EBITDA, particularly within healthcare, technology, and chosen industrial sectors.  

Venture Capital:  A key question emerging in venture capital is whether 2022–2023 vintage funds will ultimately be defined by a small number of outsized AI-driven exits. Transactions such as SpaceX’s reported option to acquire Cursor at a $60 billion valuation are being viewed by many managers as potential performance inflection points which are capable of shifting fund outcomes from flat or negative to meaningfully positive results.

Semi-Annual Public Market Reporting:  There is growing acceptance across public markets that U.S. Securities and Exchange Commission reporting requirements may transition from quarterly to semi-annual filings. While the implications are still being evaluated, many market participants believe companies seeking to maintain premium valuations will continue to report key metrics at least quarterly. The underlying logic is that companies prioritizing valuations must maintain transparency since analysts are likely to reward more frequent disclosures.  

Additionally, where companies are already providing regular financial reporting to lenders under credit agreements, similar disclosures may effectively extend to broader market participants. At the same time, reduced formal reporting requirements could lower administratively burdens and encourage more private companies to pursue IPOs.  

Crypto/Data Centers: Crypto mining companies that have invested in energy-accessible infrastructure are increasingly valued based on the higher of their crypto mining operations or their potential as data center platforms. The strategic advantage lies in their access to power which is an asset that can be readily repurposed to support AI-driven data center demand.