Tech M&A AI Traps

Artificial intelligence is often portrayed as the ultimate solution for transforming growth at companies large and small. M&A is not immune to this narrative.  But it is important to note here that there are some core limitations of the use of AI in M&A. Let's look at five major M&A AI traps to be aware of: 

Limited Visibility into Transactions  
Fewer than 15% of M&A deals disclose transaction amounts. That means AI, no matter how sophisticated, is working with incomplete data on industry activity. Experienced M&A advisors play an essential role in interpreting comparable deals, market dynamics, and company-specific factors in ways that no AI algorithm can capture.  

Valuation Misperceptions
Although you can use AI to scour publicly available data for comparable deals, this will not tell you the true value of your company. To get the true value for your company, you must go global with a professional search process. You need to talk to a larger audience of buyers who might be interested in your company. That's how you create competitive buyer tension—the auction environment will get you the highest value for a tech company.

The Buyer Mandate Blind Spot 
Buyer mandates are often very confidential. That means AI cannot reliably surface the best-fit list of acquirers for a given client, indicating that AI has significant challenges when it comes to identifying a potential buyer who is serious about making a deal. Experienced advisors, with access to private buyer conversations, continue to hold a decisive advantage in connecting sellers with the right motivated acquirers.  

Writing That Doesn't Connect
AI-generated content often feels manufactured and cookie-cutter, but companies pursuing a merger or acquisition need compelling, armor-piercing soundbites and powerful narratives to convey their message to buyers.  You need a presentation that is strategic, authentic, and flawless. AI can't deliver the kind of human storytelling that turns a maybe into a yes.

No Replacement for Relationships
Finally, relationships remain at the heart of M&A. Direct access to corporate development professionals, their decision-making style, and their openness to evaluating opportunities presented by trusted M&A professionals is something that AI cannot deliver. It is the trust and rapport built over years of interaction that opens doors—not an AI-generated buyer list that is bombarded constantly by email bots attempting to build a connection without putting in the effort and best practices in place to do so. 

AI is a tool, not a panacea. The firms that will thrive are those that harness technology as a tool to accelerate, while keeping human expertise at the epicenter of their M&A practice. AI cannot replace the judgment, relationships, and market knowledge of seasoned advisors.