AI Drives Rise in Private Funds’ Use of Alternative Data

Data security is a top concern in connection with the collection and use of alternative data among more than 100 hedge funds, private equity firms and venture capital firms, Lowenstein Sandler reported in its fourth annual alternative data survey. “The emergence of generative AI, with its potential to help firms process enormous quantities of information, is one of the most significant factors driving” the continued use of alternative data in the decision making of investment professionals, firm partner Scott H. Moss told the Cybersecurity Law Report. With additional commentary from Moss, this article distills the survey’s results regarding the industry’s use of and key concerns around alternative data, data sources, budgets, use of AI, and use of alternative data in connection with environmental, social and governance factors. See “Use of Alternative Data Continues to Grow, Says New Survey” (Mar. 29, 2023).

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