By Mark Williams, Americas Chief Revenue Officer for Datasite
Artificial Intelligence (AI) has emerged as a transformative power across various industries, not the least of which is the mergers and acquisitions (M&A) industry. With its ability to manage large datasets, intricate decision-making processes, and ensure efficiency and precision, AI has quickly become an indispensable tool for streamlining M&A procedures, enhancing due diligence, automating manual tasks, expediting data analysis for increased value and accelerated integration, and improving overall deal outcomes. Generative AI (GenAI), an artificial intelligence technology which can simulate content that appears human-generated, is poised to revolutionize the M&A sector even further.
Unlike traditional AI models, which operate within predefined rules and structures, GenAI models are trained on a set of data and learn the underlying patterns to generate new data that mirrors the training set, creating something new. By aiding in faster and more informed decision-making, creating accurate predictive models, and facilitating the generation of complex deal structures, GenAI opens new horizons for M&A strategies.
This innovation has already begun to make its mark on the M&A industry. In a recent Datasite survey, most dealmakers identified productivity as the biggest benefit of using GenAI in their business, and that it has the potential to speed up M&A by 26%-50%. Additionally, GenAI-powered tools are already helping to improve the speed and accuracy of research, including relevant deal precedents and buyer recommendations for pitches. Furthermore, a recent poll on how AI is innovating and disrupting M&A found that dealmaking respondents identified ways of working as the area that is most top of mind when they consider AI.
Yet, the incorporation of GenAI into M&A practices is not without risks, including concerns about privacy, intellectual property rights, security, and data quality. In fact, most dealmakers favor government regulation of AI. Governments have taken note, with both the EU and US proposing legislation or blueprints for the safe implementation of the technology. Additionally, in the US, President Biden recently introduced a new executive order requiring AI safety assessments, civil rights guidance and research on labor market impact.
The widespread adoption of AI may also be challenged by other factors, including costs associated with its development, implementation, and security monitoring, as well as the expected surge in energy demand from data centers hosting AI infrastructure. There may also be additional hurdles in generating revenue from GenAI, as businesses and consumers are still trying to determine what its best uses are.
Still, GenAI innovation is just getting started and though it will take some time for companies to design clear use cases and hire the proper talent to manage and implement the technology, including ensuring solid security measures, it’s clear that AI is set to be a significant disruptor in M&A.
So, while dealmakers are also concerned about job displacement because of AI, M&A professionals can prepare for the AI-powered future by embracing safeguarded AI solutions and advancing their skill sets as early adopters. By embracing the new innovations, AI can function as a valuable aid rather than a replacement, allowing dealmakers to concentrate on strategic decision-making while AI handles routine tasks. Those who cultivate AI-related skills and adapt to the evolving landscape are also more likely to uncover new prospects and career advancements in the realm of M&A.
We’re witnessing a remarkably young technology change entire professional ecosystems within just a few short months of legitimate deployment. Though new regulations and best practices will surely be announced, those who familiarize themselves with GenAI and the ways in which the technology can streamline legacy operations will be ahead of the curve when push comes to shove and companies begin indiscriminately integrating new solutions.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Image and article originally from www.nasdaq.com. Read the original article here.