Due Diligence for the AI Buildout

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Due Diligence for the AI Buildout · seventeen-essay series

Due Diligence for the AI Buildout

A seventeen-essay framework for AI infrastructure due diligence. Each essay maps one workstream from scoping through post-close validation, with question banks, worked examples, and cross-references to the AI Power Chain vendor screen. Reference material for PE sponsors, corporate development teams, and target-side operators preparing for capital events.

16essays
Aug 18 → Sept 4 2026publishing window
Question banks + workbooksreference material

01The essays

  1. 01
    The scoping decision
    What DD covers before the data room opens
  2. 02
    Team, timeline, and the anatomy of a data room
    Five internal DD roles, sequencing, and reading the seller's room
  3. 03
    Market and demand-side DD
    Testing whether demand is what the CIM says it is. Bottom-up sizing
  4. 04
    Customer, pricing, and competitive DD
    What the target captures from the demand base. Concentration + pricing power
  5. 05
    Product architecture and technology DD
    Product-spec fit, roadmap evidence tiers, differentiation audit
  6. 06
    Manufacturing, IP, and supply chain DD
    Capacity vs demand, yield, IP audit, tier 1/2 supply chain risk
  7. 07
    Quality of earnings and working capital DD
    Add-back discipline, dynamic working capital, QoE walk to normalised EBITDA
  8. 08
    Capex, growth economics, projection stress-testing
    Capex per revenue $, unit economics, three downside scenarios
  9. 09
    Organisational, key personnel, culture, systems DD
    Whether people + culture + systems can execute the DD thesis
  10. 10
    Legal and contract DD
    Corporate structure, change-of-control, non-competes, IP, litigation
  11. 11
    Regulatory, CFIUS, environmental, cyber DD
    Approvals that gate closing, liabilities that follow, cyber that walks the R&W
  12. 12
    Deal structure, R&W, escrow architecture
    How DD findings translate into the transaction paper
  13. 13
    Financing structure, covenants, closing risk
    How the deal gets paid for; covenants; what stops closing after signing
  14. 14
    Post-close validation + the DD improvement loop
    100-day validation, six-month scorecard, feeding lessons back into DD
  15. 15
    The Question Banks
    250+ questions organised by workstream + AI Power Chain layer
  16. 16
    Seller-side prep: the DD workbook
    The framework inverted for target-side founders + CEOs + sell-side teams

The AI Power Chain vendor screen

Named vendors across every layer, scored on moat, execution risk, and chokepoint. Cross-referenced from every essay in this series.

Vendor screen →
Also see: Case Studies for how the framework applies to specific transactions, Financing the AI Buildout for capital-structure essays, and Tech Spotlights for vendor + technology deep-dives.
FrameworkThe Due Diligence framework, canonical definition of the 14 workstreams organized across four stages, with three companion reference assets: Question Banks, Seller-side prep, and DD Evidence Matrix.
Companion assets · upgraded 2026-08-30

WS15 and WS16 rebuilt as operating layers, not documents

WS15 · The Question Banks is now positioned as the interrogation layer of the DD framework, not a checklist. Includes the Killer 42 — three questions per workstream that most often kill or reprice AI-infrastructure deals, each with evidence, respondent, falsifier, and downstream-workstream metadata. Question tiers (Core / Conditional / Deep), respondent guidance, and a worked question-routing chain (WS05 → WS06 → WS08 → WS13) show how one finding routes into the next workstream.

WS16 · Seller-side prep is now the self-diligence and buyer-simulation system, not a data-room checklist. Includes the CIM Claim Register (every material CIM claim reconciled to primary evidence with expected buyer challenge pre-answered), the five-part remediation taxonomy (Eliminate / Evidence / Explain / Disclose / Allocate), P / D / M evidence grading, and the DD-ready test that determines whether the seller is actually ready.

The four-piece stack now reads: WS01–14 (what to understand) → WS15 (what to ask) → WS16 (what the seller should already have proven) → DD Evidence Matrix (can we prove it).