There has been a spate of articles and social media posts in recent months about what is called the ‘AI rollup’ business strategy. This is the thesis: buy an ordinary, stable but unglamorous business; put a layer of artificial intelligence (AI) on its operations, thereby reducing costs and increasing the margins; and then, as profits rise, sell it off. Better still, acquire several similar businesses and roll them up into one with a single AI layer on top. ‘Acquire and implement AI’ has apparently become the plan for private equity and other usual suspects.
Some of the flaws in this concept are obvious. However, someone who has been in this kind of an activity had an excellent analysis. This person said that the opportunities for AI improving business operations is real because it can indeed, if implemented well, cut administrative effort and thereby increase margins.
