In the modern era, artificial intelligence (AI) has transcended the realm of hypothetical futurism and become a critical tool for businesses worldwide. Nowhere is this more evident than in the financial services sector, in which hedge fund managers increasingly leverage AI-driven technologies to gain competitive advantages and meet the demands of rapidly evolving markets. Traditionally, these tools have been synonymous with alpha generation and quantitative trading strategies. However, AI is now making significant inroads into areas such as legal, compliance and operational risk management. Why does this matter? Hedge funds operate in an environment of stringent regulatory oversight and global scrutiny. The SEC, CFTC, U.K.’s Financial Conduct Authority and other authorities worldwide expect hedge fund managers to adhere to increasingly complex and sometimes overlapping regulations. In this context, even a small oversight can lead to significant enforcement actions, reputational damage and hefty fines. By leveraging AI tools for surveillance, analytics and reporting, hedge fund managers can gain a proactive edge in managing compliance risks, ultimately strengthening investor confidence and protecting the integrity of the markets. This first article in a two-part guest series by Brian Meyer, partner at AirGC, examines the evolution of hedge fund governance; current and emerging AI use cases in compliance; and potential regulatory challenges. The second article will discuss the changing skill set required of the modern CCO, practical steps for implementing AI in compliance functions and the future of AI in hedge fund governance. For more from the author, see “Designing a State‑of‑the‑Art Hedge Fund Compliance Department: Leveraging Cutting‑Edge Technology” (Jul. 20, 2023); and “How Fund Managers Can Use Technology to Transform and Streamline Complex Legal Operations: One Manager’s Example” (Jul. 18, 2019).