The 12/31/2025 Cycle: AI Is Now Part of the Conversation

What’s also becoming evident in the ongoing 12/31/2025 valuation cycle is the role of AI in shaping valuation discussions.

Not in a theoretical way—but in very practical terms.

Auditors are starting to ask:

• Are projections still valid in light of AI disruption?
• Could margins compress faster than expected?
• Is this company an AI beneficiary—or at risk?

For some portfolio companies, AI is a tailwind. For others, it introduces real uncertainty. Either way, ignoring it is no longer an option.

A Shift Toward More Thoughtful Valuations

As a result, many funds are moving toward more dynamic approaches:

• Updating assumptions more frequently
• Using scenario-based methods where outcomes are uncertain
• Bringing in market data more deliberately
• Spending more time documenting the “why” behind the numbers

It’s a shift from static marking to active valuation.

What This Means Going Forward

The direction is pretty clear.

• Cost is still relevant—but only as a starting point
• Last round pricing still matters—but it’s not the answer on its own
• And valuation is becoming less about convenience—and more about credibility

Funds that adapt to this shift are not just better prepared for audits—they also have a clearer view of their own portfolios.

Because at the end of the day, valuation isn’t just about reporting.
It’s about understanding what your investments are really worth—today.