Understanding Generative AI

Generative AI differs from traditional analytical AI in that it creates new content rather than merely analyzing existing data. Analytical AI focuses on improving speed and accuracy for tasks like customer segmentation and sales forecasting, while Generative AI can produce original material such as music, text, or software code. For example, it may aid in drug discovery by generating new chemical compounds or enhance marketing efforts by creating tailored content. The distinction is critical for private equity firms as they look to leverage this technology to enhance their operational efficiency.