The next four years hold significant promise for artificial intelligence (AI) investment. With the return of Donald Trump to the US presidency, businesses and dealmakers are preparing for a more business-friendly regulatory environment that could accelerate mergers, acquisitions, and private-sector innovation in AI.
A Business-Friendly Landscape
The Trump Administration is expected to prioritize policies that reduce red tape, relax antitrust scrutiny, and implement corporate-friendly tax policies. This creates a stable and predictable regulatory environment—key factors for fueling M&A activity. In the past, such conditions have resulted in businesses pursuing bold deals with confidence, laying the groundwork for transformative industry shifts.
While not yet in office, the impact of these expected policy shifts is already visible. In the second half of 2024, Americas sell-side deal kickoffs on Datasite, a platform facilitating over 15,000 deals annually, rose 9% compared to the same period the previous year. Notably, in the three weeks following the election, deal kickoffs on Datasite surged by over 50% year-over-year. Since these are deals at their inception rather than announced, it provides a good indication of what’s ahead.
Much of this activity was driven by the technology, media, and telecommunications (TMT) sector, with AI assets taking center stage.
AI: A Catalyst for Innovation, Growth and M&A
AI stands to gain significantly from the pro-business agenda and Trump’s appointment of David Sacks as the AI Czar, and Sriram Krishnan as a Special Advisor. Generative AI tools, once considered niche, are now essential across industries. They are transforming nearly every space – from healthcare and finance, to manufacturing and retail – driving innovation and creating new investment opportunities.
For example, in healthcare, generative AI can enhance diagnostic accuracy and speed up treatment planning, while AI tools can streamline production processes, reducing waste and maximizing output in manufacturing. These technological advances drive growth, which ultimately attracts investment. As businesses increasingly integrate AI into their operations, the appetite for M&A grows. Acquiring startups or partnering with established tech firms allows companies to stay competitive and capture market share in a rapidly evolving landscape, without having to create AI tools themselves.
The Role of AI in the M&A Process
However, AI isn’t just a target for investment; it’s also transforming the M&A process itself. AI is already significantly reshaping the way deals are done, from automating repetitive tasks and powering data analysis, to easing processes across all phases of the deal.
Today’s M&A leaders must factor in a wide range of geopolitical, regulatory, and financial risks into their dealmaking, and they are required to manage information and data of multiple stakeholders in high pressure, time sensitive environments. AI can help dealmakers manage some of these inherent risks and due diligence is a key area that is already being transformed by the technology.
Due diligence is resource-intensive and traditionally relies upon the manual processing of tediously going through every piece of information and every document. When faced with tight deadlines and time constraints, the standard of work delivered can be compromised. AI can assist dealmakers facing this challenge by helping them quickly sort and summarize content. By surfacing core clauses and notable relevant obligations to those involved in the deal, it rapidly reduces the time involved in the processing of documents. For instance, AI can streamline the organization and categorization of files needed for review during due diligence, reducing human error and ensuring compliance with regulatory requirements. At its core, AI is a strategic enabler – helping to provide insights and greater efficiency in due diligence.
AI can also help identify potential M&A targets for buyers, by triangulating different market signals such as company description, geographic fit, and size criteria. By using private, public and paid data, some AI-powered applications are already helping dealmakers identify deal targets faster.
This approach can mean that companies are in a better position to integrate new capabilities when the deal is completed to deliver the consistent growth that was intended by the tie-up.
Additionally, AI can aid in the valuation process by providing objective analyses based on historical data and market factors. By automating repetitive and time-consuming tasks, such as redacting, AI can also enable dealmakers to focus on strategic-level decisions and creative thinking.
Furthermore, dealmakers want to use AI tools in the M&A process. Sixty-six percent of global dealmakers said exploring the use of new generative AI tools is their top operational focus area next year, while 42% view increased productivity as a primary benefit of generative AI in their business. Yet there are some gaps that need to be bridged between AI knowledge and its application. A significant amount of dealmakers say data security and privacy concerns are the biggest obstacles to incorporating AI into their businesses and a majority want the technology regulated.
Additionally, while AI can analyze financial data quickly, human expertise is still essential for interpreting results and negotiating terms effectively. Generative AI amplifies these skills, enabling dealmakers to operate with greater precision and efficiency.
The Road Ahead
The next four years promise to be a transformative period for AI and M&A. With a regulatory environment expected to support bold moves, companies can pursue deals that are likely to redefine industries. Generative AI tools will play a central role, not just as investment targets but also as enablers of smarter, faster deal-making. For the dealmakers themselves, being prepared is critical. Businesses that embrace proactive strategies, including prioritizing deal readiness and leveraging technology to mitigate risks and enhance efficiency will thrive in the evolving landscape.
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