Reports Confirm: AI Adoption Has Accelerated Across Investment Management and M&A in 2025

Over the last two years, Blueflame AI has frequently polled investment managers to understand where they are in their AI journey. In our most recent poll of 200 investment managers conducted in May 2025, we found that 73% of firms were well on their way with their AI journey, while only 27% were just getting started. Since then, we have spoken to hundreds of firms all eager to grow their AI strategy.

That’s why it came as no surprise when recent reports from Deloitte and Citi Institute revealed that investment firms are no longer just experimenting with AI tools; they are now deploying purpose-built solutions tailored to specific teams and functions, making 2025 the definitive year of AI adoption. The investment management industry has moved beyond asking "if" AI should be adopted to determining "how" it can be implemented most effectively. 

Why investment firms are embracing AI

Deloitte and Citi Institute’s reports reveal that AI adoption and investment across investment firms is on the rise. According to Deloitte's 2025 M&A Generative AI Study, 86% of organizations have integrated Gen AI into their M&A workflows, with 65% doing so within the past year. The investment is substantial: 83% of firms have invested $1 million or more in AI technology specifically for their M&A teams. Private equity firms lead this trend at 88% compared to 77% of corporate organizations.

The Citi Institute report shows similar momentum, noting that in financial services, 52% of respondents actively use Gen AI technology, up from 40% in 2023. Organizations anticipate returns on their AI investments within one to three years, with 54% of private equity firms and 50% of corporate entities expecting ROI within 1-2 years. The key driver behind this rapid adoption is the shift from using AI merely for operational efficiency to leveraging it for alpha generation. As Citi Institute notes, "The question is no longer whether to adopt AI but how to incorporate the technology into the investment process in a transparent and risk-controlled way, while also demonstrating tangible return on investment."

As Citi Institute notes, "The question is no longer whether to adopt AI but how to incorporate the technology into the investment process in a transparent and risk-controlled way, while also demonstrating tangible return on investment."

AI Implementation across the M&A lifecycle

Deloitte's report confirms what we at Blueflame AI and our colleagues at Datasite and Grata have observed across our collective client base: AI adoption spans the entire M&A lifecycle, but implementation varies at each stage:

• Strategy and market assessment: 40%

• Target identification and screening: 35%

• Due diligence: 35%

• Deal execution, post-deal integration, and valuation: 32%

What's particularly interesting is how organizations are implementing AI. Deloitte noted that nearly 60% of organizations report using general-purpose AI tools, while 43% have begun to use purpose-built AI tools that focus on specific workflows across sourcing, diligence, and research. This pattern is consistent across both corporate and private equity firms.

Nearly 60% of organizations report using general-purpose AI tools, while 43% have begun to use purpose-built AI tools that focus on specific workflows across sourcing, diligence, and research.

Key use cases driving AI adoption across M&A

Both the Deloitte and Citi reports highlight several high-impact use cases that are driving AI adoption across M&A and investment management. These use cases are consistent with what we are seeing across Blueflame AI's client base:

• Research and information synthesis:  AI enables investors to analyze vast amounts of information simultaneously, with analyses that previously took weeks now completed in hours. This is particularly valuable during compressed deal timelines when teams need to quickly absorb and synthesize large volumes of information.

• Document intelligence: Firms are using AI to generate initial drafts, take unstructured data and turn it into actionable insights, and search for key data throughout their entire document library.

• Automated workflow management: Agentic AI can monitor news feeds and market sentiment in real time. For example, if a significant event occurs for a portfolio company, it can autonomously trigger a chain of actions: updating relevant internal reports, analyzing the impact, and flagging the most relevant changes directly to analysts. Grata emphasizes how this capability helps dealmakers stay ahead of market developments that could impact valuation or deal terms.

A strategic approach to AI adoption for Investment Managers

As investment firms move beyond the initial excitement of AI capabilities to practical implementation, both the Deloitte and Citi reports emphasize the need for a measured approach to AI adoption. The industry is transitioning from being impressed by what AI can do to focusing on how to implement it effectively.

The reports suggest several key steps for successful adoption:

1. Experiment and adopt AI tools. Even if they are not perfect, the rapid rate of improvement means firms could fall behind if they delay adoption.
2. Champion your success stories internally. The success of AI adoption depends on your use cases. Socializing what's working well for your firm will help drive broader interest and overcome initial apprehension.
3. Address your data challenges. Data security, data quality, and model reliability remain the top concerns for organizations implementing AI. A solid data strategy is fundamental to successful AI deployment. Additionally, providing AI training and upskilling programs for existing teams and building internal champions can accelerate adoption.

The trend is clear: investment management firms are moving from asking "what can AI do?" to "how can we implement it effectively?" This shift requires balancing innovation with caution, prioritizing robust governance, and piloting AI in targeted use cases before scaling more broadly.

Blueflame AI's Purpose-Built AI for M&A and Investment Firms

We recognize the need for purpose-built AI that understands the investment process. We are partnering with Datasite and Grata to build the next-generation tech stack for investment firms and dealmakers. With our enterprise-grade security, privacy controls, and dedicated service teams, we're committed to providing the best-in-class solution that addresses the specific challenges identified in these industry reports.

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