Critical Risks in Using AI for an M&A

Artificial Intelligence (AI) is changing the way tech companies operate. The technology is becoming a fundamental part of the infrastructure that runs a company's operations, streamlining and improving core business processes. It is also redefining company roles and accelerating strategic decision-making. And because of its transformative potential, AI is a major attractor to tech company buyers, driving high deal volume and a growing number of billion-dollar-plus “megadeals” in tech M&A. In the first half of 2026 Corum Group recorded 1135 tech M&A deals in the AI sector and a total disclosed deal value of $119.3 billion ‒both on track to set full year numbers that break ten year records. 

AI is also starting to be used by tech company sellers as a tool to make M&A deals, that is, to find potential buyers and execute M&A transactions. But relying solely on AI to sell your tech company is highly risky. Here are some important things to consider.

Critical Risk 1: Garbage in, garbage out

As a seller, it is critical to do research and valuation comparisons ("comps") in preparation for an M&A. Analyzing the financial metrics of similar companies to yours and the valuations of those companies helps ensure that you accurately gauge offers from buyers and your company does not get undervalued.

However, using an AI tool to automate these efforts is not wise. AI tools typically rely on public data that is often months, if not years, old, and will miss recent changes in the market. In addition, AI cannot easily measure the strength of your team, your company culture, or your customer loyalty. 

Worse still, AI tools for tech company valuations are subject to "numerical hallucination," where these tools can generate completely invented revenues, growth rates, or valuation multiples that look highly authoritative, but are completely wrong.

You need current data for these tools to provide more accurate results. But the most current data is often not public. It is typically only available from expensive private data services or tech investment banks like Corum.

Working with an experienced investment banking and M&A advisory firm like Corum ensures that you get an accurate company valuation because they test real-time market demand. In addition, Corum's disciplined, eight-step M&A process is designed to create an auction environment that brings multiple pre-qualified strategic and financial buyers to the table simultaneously. Telling your story to these buyers and emphasizing how you can affect the future of their business, where they are competitively bidding for your company, is the best way to maximize your company's valuation and get an optimal deal.

Critical risk 2: Writing neutrality

It is tempting to use AI to generate an executive summary. It can certainly generate it faster than creating one yourself. But will it produce something that tells your story in a way that grabs a buyer’s attention? Probably not. Many executive summaries generated by an AI tool look and sound generic. They are often full of corporate jargon that offers little value to buyers. These tools also have a tendency to overhype features and capabilities.

Buyers are being overwhelmed with these AI-generated communications, a situation that creates a lot of frustration for buyers and does nothing for sellers. Sophisticated buyers can spot these AI-generated executive summaries easily, and when they receive them, they get rid of them quickly, as indicated by this statement from an executive:

"Nothing makes me hit delete faster than an AI generated e-mail that sounds exactly like every other AI generated e-mail."

To be effective, an executive summary needs to grab the buyer's attention by quickly and effectively presenting your value and how it maps to the buyer's needs. You need to do it with specific, accurate facts that map you and your company to best practices and disruptive trends. The writing needs to be genuine, professional, and persuasive ‒ something that AI tools cannot produce.

Grabbing a buyer's attention requires authentic human expertise that can communicate with buyers in a variety of ways such as through emails, letters, calls, and even video. 

Critical risk 3: What you don't know

To find the right potential buyers, those who can provide you with an optimal deal, requires knowing who is buying in your space, what deals they are making, and why. An AI tool might be good at determining this information if the information is publicly available. But the reality is that many buyers prefer to keep their M&A strategies private and divulge a minimal amount of information about these deals. Buyers don't want to expose deal details such as valuation multiples or pricing structures because it can give competitors insight into their financial strategy and valuation metrics. And knowing the kinds of technologies a buyer is willing to do a deal for can invite rival bids and counter-strategies from competitors on future targets.

Even if an AI tool can determine what companies are buying in your space, it usually will not know who to contact in those companies to pursue an M&A deal. Knowing who to contact and the best way to contact them depends on having previously established a relationship. M&A advisories such as Corum build long-term, trusted relationships with buyers and with their private equity partners. Buyers will only take confidential calls about an M&A from people that they know and trust. So to make those contacts it is best to work with an advisory that has already established relationships with them. Not only will an M&A advisory that has an established relationship with the buyer help identify who to contact, but they will have insights into how the buyer negotiates and how they tend to structure deals.

Critical risk 4: Disruptive trends

The key to getting a buyer's attention and building to an optimal deal is clearly presenting the future value you and your company have for the buyer. What disruptive technologies will you help the buyer leverage to grow his company? What untapped markets will you help the buyer access? Although AI tools can identify disruptive technologies like blockchain or generative AI, they do a poor job of explaining how these technologies can be leveraged by a specific seller's business model. As for helping explain how a seller can help a buyer access untapped market, AI tools usually don't have the requisite real-time market insights and the ability to detect unrecorded market behaviors. And if a market is truly untapped, data does not exist for an AI tool to analyze.

The bottom line is that AI tools are not good at explaining how a seller can help a buyer grow in the future because they lack a real, personal understanding of the buyer's unique business and culture.  To effectively communicate your value to a buyer, you need to understand their specific context, their unique market position, and their future goals. AI tools cannot provide those types of company-specific characteristics. The fact is that strategizing the future is beyond the capability of AI tools.

Critical risk 5: You - the big unknown

AI tools can identify general traits of a tech company seller, but they often miss the deep nuance of specific individuals. These tools can only read public data about you or information you enter into them. They cannot see your bank account, private emails, or secret job stress. They cannot know your tax situation, estate issues, health, long term family needs, or your desire for legacy and a better life.

Because AI tools cannot truly understand your life and your needs, those blind spots can be obstacles in an M&A deal. For instance, an AI tool may suggest an offer with the highest valuation, but if a seller has a strong desire to maintain a legacy, he may refuse the offer if the buyer plans to gut the seller’s product or fire the core team.

An AI tool might propose a highly lucrative earnout, but a seller that is experiencing burnout or health issues might need a fast, low-stress exit, and not a prolonged, aggressive negotiation for that earnout.

An AI tool might suggest an asset sale, where the buyer purchases specific individual assets but leaves some or all the existing financial or legal liabilities with the seller. However, a risk-averse seller might want to do a stock sale instead, even if it means a lower price, just for a clean break and peace of mind.

Issues like these are complex. They require professional expertise to handle, not AI.

Critical risk 6: security

Entering sensitive information about your company, such as financial disputes, or personal details, such as medical diagnoses, into AI tools creates potential data security risks. Many of the same companies that dominate AI tool development also host the backend cloud infrastructure for the world's largest social media platforms and communication networks.

Once sensitive information leaves your local device or secure corporate network, you no longer control how the AI provider retains, processes, or shares it. Even if the AI provider's current privacy policy appears to protect that information from exposure, it still can be compromised, sold, or mishandled if the provider changes its policies or gets acquired. The information can also be exposed to a data breach if cyber hackers can break into AI company databases and steal stored user logs.

Many AI systems train the AI software on user data. This means that your sensitive information can reappear in answers given to strangers. In that case, you may even be subject to a violation of non-disclosure agreements.

Do you trust these companies not to misuse your information?

Partner with professionals

Don't leave one of the most important decisions of your life to chance. Partner with professionals who know the buyers, have the team and process to execute and use AI as a competitive advantage, not a shortcut.

For more than 40 years, Corum has combined deep M&A expertise with continuous innovation, including over $100 million invested in the industry's most extensive M&A database of buyers across the globe. Paired with responsible use of AI, that experience and market-leading resource enable Corum to deliver unparalleled service, insight and results for technology M&A clients worldwide.