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Businesses are using AI for mergers and acquisitions.
It's not without data security concerns, among others.
Upskilling, regulation, and other factors could improve those issues.
Many businesses are now using generative AI tools to assist with mergers and acquisitions (M&A), a new study from Deloitte found.
Based on a survey of 1,000 senior business leaders, the study found that 86% of respondents said their organizations have already incorporated generative AI into their M&A processes. The majority of those (65%) have started to do so within the past year, signaling a rapidly escalating trend that reflects a broader embrace of the technology throughout the private sector as new AI tools promise big productivity gains.
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There's some trepidation surrounding the use of generative AI for M&A, though. According to the study, data security was the most prominent concern, cited by 67% of respondents, followed by data quality (65%), model reliability (64%), ethics and bias (62%), and other factors.
Meanwhile, 57% said their organizations are investing in upskilling and training programs to ensure their teams are prepared to use new AI tools competently and safely.
How AI is helping
According to Deloitte, the spike in businesses that have been fusing generative AI into their M&A workflows over the past year shows "investment is shifting from pilots to execution, as leaders seek measurable returns and anticipate further increases in [generative AI] spending."
But the process of merging with or acquiring another company tends to be a long and complicated one, involving a huge amount of legal, financial, and personnel logistics. AI agents might be able to handle a variety of complex tasks in those domains -- even though they occasionally snitch without reason, among other kinds of misbehavior -- but so far there's no AI system that can comprehensively handle every part of every M&A process. So where is generative AI being most widely used in this regard?
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The Deloitte study found that while the technology is being applied at every stage of the M&A lifecycle, usage among survey respondents veered most heavily toward the earlier stages, such as strategy development and market assessment (40% on both counts). Similarly, close to half (48%) of those respondents whose businesses have embraced generative AI for M&A purposes said it's been used to draft early legal documents pertaining to their deals.
For the latter stages of the process, in contrast -- such as valuation and deal-valuation -- businesses use generative AI less, according to the survey.
Issues and concerns
The majority of respondents to the Deloitte study (83%) said they believe that generative AI will "have a moderate or significant impact on M&A decision-making" in the future. That's supported by a recent report from market research firm Gartner, which highlighted "decision intelligence" -- AI-supported charting of economic and commercial trends -- as one of the major tech trends that will affect businesses in the near future.
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Widespread concerns about data security surfaced in the Deloitte survey, however, coupled with the intrinsic risks of generative AI tools (including their tendency to fabricate information), are likely to prevent AI from playing a dominant role in the M&A process anytime soon.
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That could change, however, as data governance and employee upskilling protocols improve, and if regulators step in to ensure some protections for enterprise customers.