AI in Corporate Finance: Tool, Not Replacement

Artificial intelligence is reshaping many aspects of business — including corporate finance. It can summarise documents, analyse data, and even produce draft valuation models or term sheet comments in seconds.

Some clients have begun to ask whether AI can replace the need for an advisor altogether. It’s a fair question. But the short answer is: AI can assist, not advise.

1. AI delivers general answers, not tailored advice

AI produces outputs based on large, public data sets. That means it reflects what’s typical, not what’s right for you.

Corporate finance is rarely standardised. Each transaction carries its own strategy, context, personalities, and constraints. The role of an advisor is to interpret, adapt, and structure advice for the client’s specific objectives — something AI cannot do.

2. It’s a tool that requires direction — and the outcome depends on the questions

AI can generate impressive volumes of information, but it cannot tell you which parts are relevant or credible. Advisors curate, filter, and interpret that information — turning it into insights that align with the client’s goals and risk profile. The real skill lies not in generating more data, but in discerning what matters.

AI doesn’t reason independently; it responds to the questions it is given. Advisors add value because we know what to ask and where to probe. Many of the most important insights in a transaction come not from the surface data but from identifying what’s missing or what’s hidden in the fine print. AI can’t do that without expert guidance.

3. Public data is limited

AI tools are trained on information that’s publicly available — and that data is finite. Much of it has already been indexed, summarised, and reused across large models.

Corporate finance advice, however, depends on private market intelligence: deal benchmarks, investor feedback, and strategic context drawn from live transactions. Licensed advisors operate in those networks every day. That’s where the relevant information — and the real insight — actually lives.

4. AI isn’t accountable — licensed advisors are

Under an AFSL, corporate finance advisors are bound by legal and ethical obligations. We are required to act in the client’s best interest, to substantiate our advice, and to take responsibility for its quality.

AI systems carry none of that accountability. They can’t sign off, be cross-examined, or be held responsible for errors or omissions.

5. ASIC authorises people, not algorithms

Advisory work must be conducted under the supervision of a licensed and authorised person. AI is not — and cannot be — authorised by ASIC.

That means AI can support analysis, but only under human oversight. It’s a tool within a controlled compliance environment, not a substitute for professional judgment.

6. Experience still counts

AI has no lived experience. It hasn’t negotiated a term sheet, read a boardroom dynamic, or navigated a capital raise where timing and tone make all the difference.

Experience teaches judgment — the ability to sense what’s commercially realistic, where leverage exists, and how to manage competing interests. That judgment can’t be automated.

A real-world example

A company recently used a generative AI platform to review a draft convertible note term sheet. The tool accurately summarised the key terms — but failed to detect that the proposed anti-dilution ratchet clause directly conflicted with clauses in earlier convertible notes.

One note applied a weighted-average share price adjustment, while another used a modified weighted-average formula tied to future conversion prices. When combined, the two formulas became mathematically circular — each dependent on the other — creating an unsolvable equation.

If executed as drafted, this would have rendered the capital structure unworkable and made any future equity conversion legally and commercially uncertain.

An experienced advisor recognised the inconsistency, modelled the mechanics, and redesigned the terms to preserve fairness across investors. The AI tool, although technically correct in its summary, simply lacked the context to identify a structural flaw with major downstream consequences.

The takeaway

AI will play an increasing role in corporate finance — and those who use it intelligently will have an advantage. But technology doesn’t replace the responsibilities of licensed advice, nor the judgment required to interpret complex financial and commercial realities.

AI gives information. Advisors give meaning.