The Tech Services Reinvention Cycle: AI Transformation and the Growth–Liquidity Trade-Off Ft. Jeff Rich, Sunstone Partners

The tech services industry is being forced into a reset. AI is changing how work gets done, how it is priced, and how value is measured. For private equity investors and tech services leaders, the impact is already visible. Delivery is getting automated, costs are coming down, and revenue models built on billable hours are under pressure. So the real question is: how do you create and capture value when execution itself is being commoditized? In this episode of the Zinnov Podcast, Jeff Rich, Operating Partner at Sunstone Partners, joins Sidhant Rastogi, President at Zinnov, to break down how the AI transformation of tech services is reshaping growth, margins, and exit outcomes. Jeff brings a rare operator + investor perspective, having helped scale a tech services company into a multi-billion-dollar business. He now works closely with portfolio companies across cloud, data engineering, and AI services. In this conversation, we cover why outcome-based pricing is still hard to implement in tech services, how AI agents and agentic architectures are changing enterprise workflows, and why vertical and workflow-level expertise is becoming critical. We also explore the reality of AI-driven commoditization and what it means for services firms, along with the growth versus liquidity trade-off and how it impacts valuation and exit timing. A key takeaway is that AI usage does not matter unless it shows up in revenue growth, margin expansion, or EBITDA. This episode is especially relevant for private equity investors, founders, and leaders of tech services companies navigating the shift to an AI-driven market. Tune in for a grounded, no-hype perspective on what it takes to build, scale, and exit in the next phase of technology services.