# Elad Gil Bets on AI-Powered Rollup Strategy
The investment landscape is shifting as AI continues to transform industries, and venture capitalist Elad Gil is placing his bets on a unique strategy: AI-powered rollups.
## The AI Rollup Playbook
Gil, an early investor in AI startups like Perplexity, Character.AI, and Harvey, sees a new opportunity in acquiring traditional businesses and scaling them with AI. His approach involves:
– Identifying professional service firms (law firms, consulting, healthcare) with high human labor costs
– Automating repetitive tasks with AI to boost efficiency
– Using improved margins to acquire and consolidate similar businesses
> “Generative AI excels at understanding and manipulating text, coding, and back-office processes. If you convert these tasks into software, you can dramatically increase margins,” Gil explains.
## Why Rollups Work with AI
Unlike traditional tech rollups that relied on superficial automation, AI enables deep operational transformation:
– Cost restructuring: AI reduces labor expenses, increasing profitability
– Scalability: Automated workflows allow rapid expansion
– Competitive advantage: Higher cash flow enables aggressive acquisitions
## The Challenges Ahead
While promising, AI rollups require the right team composition:
– Technical expertise to implement AI solutions
– Private equity experience to manage acquisitions
Gil notes that finding this combination is rare, which is why he has only backed two companies in this space so far.
## The AI Rollup Contenders
Among the startups in Gil’s portfolio:
– Harvey AI (legal AI, valued at $5B)
– Abridge (healthcare documentation AI, raised $250M)
– Sierra AI (customer service automation)
## The Future of AI Rollups
Gil believes the market is now reaching a maturation phase, with clear winners emerging in sectors like legal, healthcare, and customer support. However, he cautions that the space is still evolving:
> “It’s not game over—there are still opportunities, but the landscape is becoming clearer.”
For Gil, AI-powered rollups represent more than just an investment trend—they’re a fundamental shift in how businesses will scale in the AI era.