A new survey has highlighted growing concerns among global M&A dealmakers regarding the risks posed by artificial intelligence (AI). In particular, dealmakers worldwide are wary of the risks associated with generative AI (GenAI).
The survey, from SaaS-based M&A technology provider Datasite, found that 73 per cent of dealmakers polled believe that governments should regulate AI. The survey polled 500 dealmakers across the UK, US, France and Germany.
While the poll highlighted several key benefits that AI can deliver for dealmaking, it also revealed the leading concerns among dealmakers regarding AI, including data privacy and security concerns (cited by 34 per cent), job displacement (25 per cent), quality control (20 per cent) and intellectual property rights, bias and fairness (9 per cent).
Regarding GenAI in particular, 42 per cent of dealmakers said that the biggest benefit was improved productivity, but 36 per cent cited data security and privacy issues as the primary obstacle in incorporating it into their business. 26 per cent, meanwhile, cited a lack of competence and expertise, 20 per cent cited the immaturity of the technology or need for further validation of GenAI and 12 per cent cited unclear application use cases.
Overall, 14 per cent of dealmakers said that they had seen a deal derailed over GenAI-related concerns, with the leading concerns being security, privacy and compliance, data and data quality, competence and expertise, transparency and explainability and technology validation.
Datasite Chief Executive Officer Rusty Wiley commented: “From automating manual, repetitive tasks, such as organizing and categorizing files in preparation of due diligence, to powering data analysis to increase value and accelerate M&A integration, AI is already reshaping various phases of the dealmaking process.”
“However, there is a healthy awareness of the challenges associated with GenAI, and acknowledgment that establishing systems, processes and regulatory frameworks are critical to effectively harnessing its benefits and mitigating risks.”
Respondents to the survey largely felt that the biggest opportunities AI could bring to deal management were in streamlining processes, rather than in driving outcomes, with GenAI expected to have the biggest impact on improving processes. This was followed by improving deal intelligence and helping dealmakers make better deal decisions.
Over half of dealmakers polled said that GenAI could help to speed up deals by between 26 and 50 per cent, but just 15 per cent felt it would reduce costs in dealmaking or improve the identification of risks. Furthermore, 52 per cent anticipated that GenAI would increase their daily workload and 51 per cent were concerned about its potential impact on their employment.
Looking at the impact of GenAI on specific sectors, 43 per cent expected it to be most disruptive in the technology, media and telecommunications (TMT) sector, followed by the financial services sector (24 per cent) and the healthcare and life sciences industries (12 per cent).
Software engineering is expected to drive the most Gen AI-related M&A opportunities over the next five years (cited by 33 per cent), along with research and development (25 per cent) and marketing and sales (24 per cent).
Datasite’s Wiley added: “M&A is ultimately a relationships business, and people are essential to driving deals forward. As an industry on the precipice of a massive shift in technological adoption, it will be important for dealmakers to ensure their business models are primed to leverage AI to increase efficiency, apply sharper insights and ultimately improve deal outcomes.”
Find out more about emerging M&A trends related to AI:
2023: An outlook on developing M&A trends
M&A in financial services - digitisation, disruption and divestments
AI in M&A: How can buyers and sellers harness the technology?
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