Ares Management focuses on enhancing existing systems with AI layers in Q1 2026, emphasizing operational efficiency without quantifying AI-related expenditures.
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What are Ares Management's plans for AI-related spending and capital expenditures in Q1 2026?
In the Q1 2026 earnings call, Ares described its approach as operational and software-enablement oriented rather than a broad technology replacement cycle. Management stated it has “over 500 core systems” (including “financial systems, cybersecurity, order and trade management systems”) and that it is not “ripping those systems out,” but instead “putting an AI layer in to get the most efficient output” from those systems and the data in them. 1 The company also emphasized that this resembles using AI to supplement existing tools (e.g., “you are probably not ripping Excel out of your computer—you are using AI to supplement a core system”), and that many AI opportunities “enhance rather than displace core systems.” 1
What is not provided in the excerpts: there is no quantified dollar amount for AI-related spending (e.g., capex or opex dedicated to AI) in Q1 2026, and no explicit guidance for AI spend levels going forward. The excerpts discuss the method and direction of AI adoption, but not spending magnitude. 1
Ares also discussed an AI-related risk review within its software-oriented portfolio. Management said it conducted a “nine-week independent and detailed review of the potential forward-looking AI risk” in its software-oriented portfolio companies (including consideration of “lower software exposure” in certain European direct lending). 2 That review used a spectrum grading framework and concluded the “software-oriented portfolio is very well positioned” with 86% low risk, ~13% medium risk, and 1% high risk of AI disruption. 2 Management further suggested that (if the framework is directionally correct) medium-to-high risk exposure represents “less than 2%” of U.S. and European direct lending AUM and “well under 1% of” total firmwide AUM. 2
Relevance to spending/capex in Q1 2026: this appears to be a consulting/underwriting analytics effort (review) rather than capital expenditures (no capex figure or capex classification is provided). 2
Across the provided Q1 2026 excerpts, Ares mentions AI-enabled operational improvements and portfolio analytics, but it does not provide:
So, based strictly on the excerpts, the company’s AI plan is described qualitatively (AI layer on existing systems; AI enhancement vs displacement), while AI-related spending and capex are not quantified in the Q1 2026 materials you provided. 1
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