Private equity experienced a dramatic slowdown in the first quarter of 2024, with groups agreeing to acquisitions worth just $172 billion—a staggering 36% decline from the previous quarter. This sharp contraction reflects a fundamental shift in dealmaking sentiment, as investment firms grapple with unprecedented uncertainty around artificial intelligence's impact on company valuations and market dynamics. Sources within major PE firms indicate that AI-related valuation concerns have become a primary brake on deal activity, as investors struggle to model the technology's long-term effects on traditional business models. The pullback extends across multiple sectors, though technology and software companies—historically attractive to private equity—have seen particularly steep declines in acquisition interest as firms question whether current asking prices adequately reflect AI disruption risks.