BROWN ADVISORY ANNUAL REPORT

PARTNERSHIP

More Time to Think: Embracing AI Across Our Business

AI’s transformative potential is widely acknowledged — from boardrooms to living rooms, both excitement and apprehension are growing as people consider how AI will reshape the ways we work, communicate and solve problems. Yet, we are still only at the beginning of this profound shift. What’s clear is that AI is already leaving its mark on our society: For example, it is estimated that at the end of 2025, roughly half of all businesses were using task-specific AI agents to accomplish activities in their workflows. At Brown Advisory, we are actively evaluating both the promise and the risks of this technology, exploring innovative ways to harness AI within our operations. Our commitment is to integrate AI thoughtfully and strategically, elevating how we work and delivering even greater value to our clients.

Evolving Our AI Approach

Our perspective on AI has progressed at a remarkable pace — at times, it seems to shift by the week as the technology evolves. Just two years ago, AI was on the fringes of mainstream awareness, but the public launch of ChatGPT in 2023 marked a pivotal moment, propelling generative AI into the global spotlight. In those early days, our focus was on grasping the fundamentals of AI and assessing how emerging tools might drive value for an investment firm. We made a strategic commitment to invest in our talent, encouraging our technology team to deepen their expertise in AI applications and welcoming an AI expert, Martin Ouimet, as our Director of Business Data and Analytics.

By early 2025, we moved from exploration to a purpose-driven phase of experimentation. We launched targeted projects aimed at boosting efficiency and improving outcomes in some of our most critical workflows. We prioritized high-impact use cases in areas such as investment research and client reporting.

AI in Daily Practice: Gaining Efficiency

Today, AI has become an everyday tool for most of our colleagues, primarily to make their work more effective and efficient. This reflects the wider financial industry, where AI is no longer futuristic but part of day-to-day operations. In fact, over 80% of executives in finance now use AI tools personally, underscoring how quickly these technologies have become ubiquitous. At our firm, team members across departments are leveraging AI in various ways to amplify productivity:

Research and Analysis: Analysts use AI-driven search and summarization to sift through earnings reports, filings and research notes, pulling out key insights in seconds. This saves time and helps uncover connections that inform better investment decisions.
Client Service and Strategic Advisory:Our client teams leverage AI to ensure the quality and accuracy of communications and reporting delivered to our clients. By swiftly gathering and verifying data, AI gives our advisors more time to focus on building meaningful relationships and providing tailored, high-value guidance.
Internal Operations: Retail-oriented private funds can involve layered fees and more complex structures, increasing the importance of fee scrutiny, due diligence and confidence in manager execution.

All these efforts share a simple goal: use AI to get relevant information faster and in a more digestible form, ultimately making us better at serving clients. We are beginning to see this goal materialize as AI tools cut through information noise and augment our human judgment in daily decisions.

A Thoughtful, Ongoing Commitment

At Brown Advisory, our commitment to AI is both enthusiastic and deliberate. While generative AI’s mainstream adoption is still in its early stages, we recognize that true technological revolutions unfold over time. We approach AI initiatives with rigor — carefully managing risks around data privacy, fairness and reliability, and ensuring every use case is subject to thorough scrutiny.

Leadership remains central to our AI strategy. Our Co-CEOs provide direct oversight, ensuring AI initiatives stay aligned with the firm’s priorities and receive appropriate sponsorship. They also lead by example, using AI tools in their own work to deepen understanding and encourage firmwide adoption. These insights are shared broadly, fostering a culture where all colleagues are empowered to experiment and build their AI skills.

In summary, we view AI as a transformative opportunity and are embracing it with optimism, realism and a strong sense of responsibility. By remaining thoughtful and strategic in our approach, we aim to harness AI’s potential to deliver exceptional outcomes for our clients and to continuously enhance our firm’s performance in the years ahead.