North American VC and private equity firms expect AI restrictions due to governance concerns
Two out of three currently use AI for due diligence, and almost all use AI to some extent
However, the study shows one in three do not have company AI policies in place
More than half (54%) of US and Canadian venture capital and mid-market private equity firms believe their use of AI will be restricted within the next 12 to 18 months due to governance concerns, new research* for Ocorian, a leading US and global asset service provider, shows.
Just one in five (19%) believe their firm’s use of AI will become more open and widely adopted due to a combination of internal governance and external regulation.
The study with senior US and Canadian executives at mid-market private equity and venture capital firms responsible for $335.25 billion assets under management found widespread use of AI currently, with almost all (95%) using it to some extent in relation to investment deals and decision making.
Nearly two out of three (64%) use AI for due diligence and data analysis while 61% say AI is supporting portfolio monitoring and performance analytics and 32% are using it for deal screening and sourcing. Around 37% are testing or piloting AI tools in investment deals and decision making.
Despite widespread use the research by Ocorian, which provides fund solutions in the US and globally, found one in three (33%) currently have no formal policy on the use of AI in compliance, investment decision making or operations.
Around two out of three (65%) have an AI policy for investment decision making while half (51%) have a policy for compliance and regulation. More than one in five (21%) questioned say they will implement an AI policy within a year.
Companies questioned say AI will have the biggest impact on their operations in the next two to three years in integration with internal business data to enable faster decisions. Investor communications and LP reporting is another area where AI is expected to have a big impact.
Data management is seen as the main driver of greater technology adoption in the sector ahead of efficiency and scalability with AI and automation ranked as third among the main drivers of technology adoption.
Ocorian’s study found firms believe the greatest barrier to increased technology adoption is concerns about job displacement, ahead of internal resistance to change which includes a reliance on Excel, legacy data and customised systems. Cybersecurity risk and regulatory pressure is regarded as the third greatest barrier, with some firms noting that despite the SEC’s recent withdrawal of several proposed rules (including one targeting the use of AI), regulatory expectations are far from disappearing. State-level privacy laws, global regulatory divergence, and investor scrutiny will continue to shape how firms govern AI adoption.
“Regulatory breathing room is not a free pass,” said Tanner Kreger, Sr. Consultant, Regulatory and Compliance at Ocorian. “The SEC’s decision to shelve several AI and cybersecurity-focused proposals simply shifts the spotlight to firms’ own governance standards. Without proportionate guardrails, the policy gap quickly becomes a conflict-of-interest risk, inviting operational missteps, reputational damage and renewed regulatory scrutiny. Forward-thinking firms are pairing innovation with accountability today, often tapping external expertise, to ensure their AI ambitions remain both scalable and defensible.”
“AI is already embedded in the way many firms source, analyse and monitor investments,” said Howard Nurtman, Managing Director – Regulatory & Compliance Services at Ocorian. “The challenge now is less about adoption and more about alignment – ensuring that policies, controls and people keep pace with the speed of the technology. Investors and regulators alike will judge managers on how responsibly they balance innovation with oversight, and those who get it right will differentiate themselves in a crowded market.
“In annual trainings we give to clients for compliance, we always talk about how the regulators are struggling to keep pace with new technology. That will certainly be the case with AI. ”
*In May 2025 Ocorian commissioned independent research company PureProfile to interview 100 senior venture capital and mid-market private equity professionals in the US and Canada working for firms with $335.25 billion assets under management
About Ocorian
Ocorian is a global leader in fund services, corporate and trust services, capital markets, and regulatory and compliance support.
Unlocking new value for its clients across jurisdictions and service lines is Ocorian’s priority; it manages over 20,000 structures on behalf of 9,000+ clients including financial institutions, large-scale international organisations, and high-net-worth individuals.
Ocorian provides fully compliant, tailored solutions that are individual to clients’ needs, no matter where in the world they hold financial interests, or however they are structured.
The group offers a full suite of corporate, fund and private client services across a network of offices spanning all the world’s financial hubs. Locations include Bermuda, BVI, Cayman, Denmark, Finland, Germany, Guernsey, Hong Kong, Ireland, Isle of Man, Jersey, Luxembourg, Mauritius, Netherlands, Norway, Singapore, Sweden, UAE, the UK, and the US.
To find out more about Ocorian and its services, including regulatory information, visit www.ocorian.com
Ocorian in the US
Ocorian first entered the US market in 2021 with the acquisition of Philadelphia-based Emphasys Technologies, marking the start of its expansion across the country. Since then, the company has been enhancing its onshore capabilities, making key hires and building out its service offerings to support its growing client base, most recently announcing the acquisition of EdgePoint in Dallas, Texas and E78 Fund Solutions.
Through its New York operations at 505 5th Avenue, Ocorian provides fund managers, private clients, and companies with access to structuring and fund domiciliation hubs worldwide, from Europe and the Middle East to the Caribbean, Latin America, Africa, and Asia Pacific.
The firm's extensive network enables it to deliver proactive administration and compliance solutions that optimise investment performance and business operations across the debt, private, and capital markets.