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There are now more than 19,000 private equity funds worldwide, outnumbering McDonald’s restaurants, a striking symbol of how crowded the industry has become. With so many players and slowing fundraising, firms are under pressure to find new ways to deliver returns. The top tier still attracts billions, but smaller funds are increasingly squeezed, setting the stage for consolidation across the sector.

One major hope: artificial intelligence. Private equity giants are pouring billions into AI infrastructure, particularly data centers, betting the emerging asset class will provide the next wave of growth. With trillions of dollars in capital needed to finance data centers and computing infrastructure, the industry is casting AI as its next growth engine. If those bets pay off, private equity could reassert itself as a driver of innovation and capital formation; if not, the sector’s saturation may leave too much money chasing too few viable opportunities.

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