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The best of both worlds: why the future of business success lies in combining natural and artificial intelligence

By Jess Burgess, Investment Manager

Rarely has a day gone by this year without a new ‘rise of AI’ article being published. Whether it’s an Economist cover story about the existential threat (or not) posed by machine learning, an open letter from academics on digital consciousness, or a warning of the potential danger of neural networks from the ‘godfather’ of the field, the seemingly inexorable rise of artificial intelligence has arguably been one of the defining stories of 2023 so far.

The launch of ChatGPT has opened the floodgates to a deluge of speculation over what it might mean for the way we live and work, and with the chatbot soon to be incorporated into Microsoft 365, where it will be able to summarise MS Teams meetings, create PowerPoint presentations from just a few simple prompts, and even draft and reply to emails, the sheer range of industries that could be revolutionised by AI is growing all the time.

Indeed, it can already be difficult, if not futile, to distinguish between an email sent from a person or from a robot, and it is often far easier to just assume any inbound message from someone you don’t know is a fake and ignore it. For a business which places a heavy emphasis on making new connections and building relationships, this can present a problem. To succeed in this new AI-powered reality, businesses and their investors will need to assimilate the best aspects of natural intelligence with those of the artificial.

At Sovereign, data-led origination is vital in the early stages of our research process to help us understand the profile of a business at a high-level. It can accelerate sector-mapping exercises for Buy & Build strategies and enable a quick quantification of market opportunity.

We have significant in-house technical – and technological – expertise and we marry this with dedicated sector specialists who cultivate and nurture relationships with our stakeholders to carefully consider aspects of M&A success that a machine may miss, such as cultural fit and shareholder readiness.

This process is managed by 10 humans like me in what is one of the largest origination teams of its kind in the European mid-market. When we reach out to prospective businesses, we do not expect to get an instant hit. We take a long-term, patient approach to engaging with founders and management teams. Our timing is mostly driven by how long it takes for us to individually identify, qualify and connect with those companies we think are a good fit for our strategy. We have a genuine, personal interest in getting to know a business and understanding it operates, whether that’s for a potential investment within the next 12 months or starting a relationship that may last for years.

In case you are wondering, this post was written by me! ChatGPT could have trotted out a generic, bland piece of content marketing about the impact of AI on M&A (and itself) quite comfortably in seconds, but, given the theme of this piece, it was important its authorship reflected Sovereign’s culture and ethos, a ‘best of both worlds’ approach, one powered by technology but always focussed on people.

And yes, please do ask ChatGPT if this was written by a human!