SEC Intensifies Oversight of AI-Assisted Fund Valuations as Private Assets Surge

The Securities and Exchange Commission is escalating examinations of how investment funds use artificial intelligence in pricing decisions, signaling heightened regulatory alarm about valuation accuracy as private assets flood into alternative funds. SEC examiners beginning in fiscal 2027 will prioritize scrutiny of private fund valuations and artificial intelligence deployment, focusing on cybersecurity vulnerabilities, governance gaps, and whether firms can reliably value the complex holdings now dominating their portfolios.