Artificial intelligence (AI) has increasingly proven its transformative potential across industries, including private funds. As more fund managers and legal departments embrace AI applications, it is crucial to grasp how that technology impacts legal and compliance functions at fund managers. At one end of the AI spectrum, traditional pattern recognition AI is capable of discerning patterns and anomalies within vast data sets to support vital operations such as fraud detection and compliance audits. On the other end is generative AI – a technology capable of creating new data and insights extrapolated from existing data sets. The rise of AI heralds significant potential benefits, such as enhanced operational efficiencies, material cost savings and improved decision making. However, introducing AI into PE also presents intricate, diverse challenges ranging from ethical considerations and cybersecurity vulnerabilities to intellectual property complexities. This two‑part series delves into the pervasive impact of AI on the legal and compliance space. This first article explores how fund managers can beneficially use AI, including for portfolio analysis, due diligence, discovery, legal research and contract analysis. It also provides a brief glimpse into some of the ethical and regulatory concerns raised by this new technology. The second article will dive into the paramount concerns raised by AI, such as ensuring privacy, preventing discrimination and maintaining quality control, while also outlining best practices for implementing the technology. See our two-part series “Evaluating Privacy and Cybersecurity Risks in Emerging Technology Transactions”: Artificial Intelligence and Education Technology (Sep. 28, 2021); and Biometrics, Financial Technology and Cryptocurrency (Oct. 5, 2021).