Tide Rock, a private equity firm based in San Diego and New York, has made a clear stance against using artificial intelligence to cut costs or improve efficiency. CEO Ryan Peddycord emphasized that the company’s core principle is growth, not financial engineering, and that discussions around AI being used to reduce headcount or streamline operations are off-limits. The firm, which manages $1 billion across its investments and dry powder, focuses on acquiring founder-led businesses that are looking to transition due to personal reasons such as retirement or health issues. These founders often prioritize preserving their company’s culture, brand, and employee base over maximizing short-term financial returns. For them, selling to Tide Rock is not about cost-cutting but about ensuring long-term sustainability and growth. To support this mission, Tide Rock brings in experienced executives like chief marketing and revenue officers who are skilled in running businesses, rather than relying on traditional private equity models that focus on restructuring and debt financing. Since its founding 13 years ago, the firm’s portfolio companies have achieved an average annual organic revenue growth of 24%, with only one losing investment over that period. AI is used at Tide Rock, but not to cut jobs. Instead, it’s integrated as a growth tool. The firm has developed a library of over 100 videos and 500 pages of operational documentation that standardizes best practices across its portfolio. AI tools are now part of this system, helping to accelerate processes like integrating customer relationship management systems—reducing implementation time from 12 to 18 months down to just 30 to 45 days. One of the firm’s early AI investments was in data tools to identify potential acquisition targets. At the sub-$10 million EBITDA level where Tide Rock operates, public data sources like Pitchbook and Crunchbase are often incomplete. So the firm built its own systems to gather non-public information and reach out to companies. This same capability has proven valuable for its portfolio companies. For example, when Blue Origin wins a government or defense contract, Tide Rock uses AI to analyze public details and reverse-engineer the specific components and services needed. This allows its manufacturing clients to position themselves early as qualified suppliers—giving them a competitive edge in fast-growing sectors like aerospace and defense. Peddycord believes that cost-cutting through AI is a crowded space, with many third-party tools already doing the heavy lifting. Rather than reinventing the wheel, Tide Rock focuses its resources on areas where it can add unique value—like helping businesses grow, scale, and connect with new opportunities. For the firm, AI isn’t about efficiency; it’s about enabling growth, preserving legacy, and supporting people.