The impact of artificial intelligence on venture capital: a critical outlook

Journal article

This paper examines how the adoption of artificial intelligence (AI) technologies is transforming the venture capital industry. Leveraging interviews with industry practitioners who are actively working on the adoption of AI tools, we develop a critical outlook on the likely changes awaiting the industry. We find that AI tools accelerate the sourcing and due diligence of venture deals. However, the final authority to make investment decisions remains with humans. We identify socially grounded conviction and gut feelings as two key human proficiencies that AI systems struggle to replicate. Relationships embedded in their professional networks also allow venture capitalists to provide value-added support to their founders in ways that cannot be easily replaced by AI systems. As AI systems are adopted industry-wide, they will broaden founders’ access to funding and shift market power away from investors. It is not the AI infrastructure itself, but human proficiencies, such as socially grounded conviction, gut feeling, and networks, that will allow venture capital firms to competitively differentiate themselves.

Authors: Hellmann, T; Gansäuer, R; Mulla, J; Qian, M

• Publication status: Published
• Peer review status: Peer reviewed
• Publisher: Oxford University Press
• Journal: Oxford Intersections: AI in Society
• Publication date: 2026-03-06
• Acceptance date: 2026-01-14
• DOI: 10.1093/9780198945215.003.0146
• Language: English
• Keywords: artificial intelligence; venture capital; investment process; conviction; gut feeling; network relationships