Yesterday at the Private Debt Investor Conference in Hudson Yards, I sat on stage with Mark Solovy of Monroe Capital in front of more than 400 private credit investors and LPs. Our fireside chat was titled “The Future of Private Credit — Powered by AI.” The energy in the room was palpable: investors aren’t asking if AI will transform private markets, but how fast and who will lead.
That urgency stands in sharp contrast to headlines declaring that AI is overhyped. MIT’s recent GenAI Divide study found that 95% of enterprise AI pilots deliver no measurable impact on the P&L. Even Sam Altman has admitted that “we’re in a phase where investors as a whole are over-excited about AI… smart people get over-excited about a kernel of truth.”
But the reality is more nuanced. A competing Stanford study shows that while early-career analysts are being displaced in AI-exposed roles, senior analysts who learn to work with AI are producing outsized value. In other words, AI isn’t failing; it’s reshaping who creates value, and how.
Why Finance Is Different
Nowhere is this divide sharper than in finance. For decades, private market deal teams have been trapped in manual, offline workflows: Excel models emailed around, fragmented PDFs, and weeks of diligence slowed by version control. General-purpose AI isn’t built for this. Finance requires context, precision, and auditability. Without them, AI is not just unhelpful, it’s dangerous.
The answer isn’t “full autonomy.” As YC’s Startup School notes, enterprises aren’t ready for it. What wins instead is partially autonomous AI: systems that automate repeatable tasks while keeping humans in control, paired with white-glove implementation, forward-deployed engineering, and training so teams can actually trust and adopt them.
The F2 Approach
That’s the lesson we learned building AI for more than 270 private credit funds and banks on Arc’s debt marketplace over the last 2 years. Sitting shoulder to shoulder with deal teams, we realized that generic AI couldn’t solve their problems. So we launched F2 out of Arc with a single focus: building AI-native infrastructure for private markets.
F2 combines:
- Document intelligence to process fragmented data rooms
- Customized memo generation that adapts to each firm’s standards
- F2 Agents that reason across complex financials
- Collaboration tools purpose-built for deal teams
- Enterprise-grade security to protect firm’s data as if its our own
Every output is audit-ready, source-linked, and customizable. And unlike most enterprise pilots that fail at rollout, F2 is delivered with phased onboarding, white-glove support, and enterprise-grade compliance.
Proof of Conviction
F2 just announced an oversubscribed $10 million equity round from 50 of Arc’s longstanding investors—evidence of deep belief in the category. Already, the platform is trusted by dozens of leading deal teams across private credit, private equity, and commercial banking, battle-tested on thousands of middle market data rooms.
That conviction is reflected in the broader market too. Yesterday’s standing-room audience at the Private Debt Investor Conference underscored how urgent the shift feels inside the industry. The questions from LPs and GPs weren’t about whether AI could be useful; they were about how quickly it could be implemented and what competitive edge it would create.
What makes F2 unique is that every implementation feels bespoke. Generative AI provides a malleable surface area that adapts to each firm’s “secret sauce,” while scaling seamlessly in the background.
The New Playbook
The MIT study is right about one thing: most enterprise AI fails. But the 5% that succeed look more like F2—purpose-built, partially autonomous, and deeply integrated into workflows that actually matter. For private markets investors, this isn’t incremental efficiency, it’s a step change.
Junior teams won’t be replaced; they’ll be upskilled into system operators, leveraging agentic AI to outperform their peers. The earliest adopters will unlock faster diligence, sharper insights, and more LP dollars flowing to their funds. The laggards will fall away.
Everything in private markets is about to change. The old playbook that guided the industry for the last 30 years will be obsolete within 36 months. Once private capital runs on AI rails, markets will become more efficient and capital will move more freely, powering the next wave of economic growth.
That’s the future we’re building with F2.