Big Four pulled in for AI startup scrutiny

The fund brings in chief technology officers (CTOs) from portfolio companies and other experts from its network to pressure-test those claims before investing.

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AI diligence now stretches beyond just product claims.

(ISTOCKPHOTO)

For advisory firms, the diligence lens is broader still. AI diligence now stretches beyond product claims to include the data layer, contracts, business viability and whether the company has the internal talent to deploy AI at scale, said Siddharth Vishwanath, advisory markets leader at PwC India.

That means checking who owns the data, whether it was acquired legitimately, whether consent and privacy safeguards are in place, how reliable and fair the outputs are, and who is liable if the AI fails.

"This kind of work is more common in private equity than in early-stage venture capital, because PE firms usually enter once a company has customers, revenue and enough operating history to test," said Vishwanath.