Private equity market giants are hoping the next growth wave will help separate the wheat from the chaff in this overcrowded industry.

KKR & Co. partner Alisa Wood stated at the "Women, Money & Power" event in London on Wednesday that there are 19,000 private equity funds in the United States, compared to 14,000 McDonald's locations. "How can there be more private equity funds than McDonald's? This is crazy, right?"

After decades of rapid growth, rising interest rates have made it difficult for buyout firms to exit investments, find new opportunities for excess returns, and return cash to investors. With momentum slowing, the investment, returns, and reinvestment cycle that drives the alternative asset market could be disrupted.

Private equity firms are raising and deploying billions of dollars in the AI sector, particularly data centers, hoping this emerging asset class will bring the next growth wave to the struggling industry. They are acquiring AI companies and data center providers through equity and real estate operations, and securing loans against these assets as collateral.

Brookfield Asset Management CFO Hadley Peer Marshall stated that approximately $7 trillion in investment would be needed to fund AI's rapid development. Her company is among many large private capital firms seeking to play a central role in the technology's advancement.

Its competitor Blackstone's global real estate co-head Kathleen McCarthy-Baldwin said that due to surging computational demand, Blackstone is extremely enthusiastic about data centers. She noted that her company does not believe there is a bubble in the industry.