With President Biden’s executive order on artificial intelligence (AI), we’re finally seeing some form of government action on the emerging technology that’s already impacted nearly every industry. While more robust oversight will surely come into the fold, it’s likely consumers can expect the continued rapid deployment of AI technologies at various companies and within the services that they interact with daily. To identify where consumers should be paying attention, I spoke to Doug Cullen, chief product and strategy officer at Datasite, a global leader in facilitating mergers and acquisitions (M&A), who recently surveyed dealmakers on their outlook for AI.
Gary Drenik: Can you tell me a bit about Datasite and the services that the company provides?
Doug Cullen: Datasite is a leading cloud-based software and services provider for the M&A industry, providing global dealmakers with the tools they need to succeed across the entire deal lifecycle. Dealmakers in more than 180 countries, including 74 of the top 100 legal firms and all top 20 global financial advisory firms, make their deals in Datasite. The company facilitates more than 14,000 new deals annually, including corporate actions, such as mergers and acquisitions, restructurings, or initial public offerings. In 2022, Datasite facilitated a quarter of the top 100 global deals.
Drenik: I understand that Datasite recently surveyed 500 M&A professionals on their thoughts on artificial intelligence—what exactly did you find out?
Cullen: Yes, AI is already impacting M&A, and we wanted to know how dealmakers feel about these innovations. We learned that when it comes to generative AI (GenAI), dealmakers largely want government oversight of the technology ahead of widely incorporating it into their business. Almost three quarters (73%) of the dealmakers from all markets we surveyed across the US, UK, France, and Germany said governments should regulate AI. Additionally, while 90% of dealmakers said they have moderate to extensive familiarity with AI, more than 60% said adoption of GenAI at their own organizations was low or that they were using it experimentally, suggesting personal familiarity has yet to translate into any professional integration. This may be driven by data privacy and security concerns, which most dealmakers (34%) identified as the greatest risk to using GenAI in their business.
Drenik: According to a recent Prosper Insights & Analytics survey, 47% of executives utilizing ChatGPT are using it primarily for research purposes—but what types of deals are M&A professionals looking out for in the TMT sector?
Cullen: Digital transformation remains one of the most important driving forces for businesses, especially as many try to capitalize on innovations in data and analytics, robotics, automation, and artificial intelligence. Businesses can’t afford to fall behind the pace of innovation via available technologies, and M&A offers one route to fulfilling these objectives.
New technologies, such as cloud-reliant AI and GenAI, are causing demand for cloud services to climb. Additionally, changing regulations, including policy transitions to net zero, and new technologies, such as clean tech, are creating several new opportunities, especially in the energy and power sectors. The US Inflation Reduction Act (IRA) gave the US energy and tech sectors a big boost, injecting a proposed $369 billion into climate change and energy security investments, including tax and other incentives.
Drenik: How could this impact consumers directly? Are there megadeals, or other types of deals, on the horizon that could shake up legacy operations that they interact with?
Cullen: There are now over 270 new clean energy projects announced, with investments totalling $130 billion, since the IRA was signed. Beginning this year, the IRA also provides for a $7,500 tax credit for US consumers who buy a new, qualified plug-in electric vehicle (EV) or fuel cell electric vehicle (FCV). This may provide an alternative to some of the US consumers (approximately 36% of Adults 18+, according to a recent Prosper Insights & Analytics Survey) who have said they plan to drive and spend less because of fluctuating gas prices this year.
Drenik: What is something about M&A that consumers might not realize takes place behind the scenes?
Cullen: M&A deals usually involve intricate financial and legal considerations and are primarily completed for strategic or financial reasons, such as expanding market share or gaining access to new technologies. They also often involve financial evaluations, including an assessment of a company’s valuation and future cash flows, and are subject to stringent legal and regulatory requirements. Because of this, they can be complex. That’s why using tools and available technologies to support the M&A management process can be so useful. They can help streamline the process from initial deal sourcing and due diligence to integration planning. They can also enhance collaboration, allowing teams to work together in real time, and because they often include robust security features, they can protect sensitive information. Additionally, M&A tools often come with advanced analytics and reporting capabilities, providing insights into deal progress, performance metrics, and potential risks. This can help stakeholders make more informed decisions.
Drenik: Very interesting insights—it’s evident that AI will continue to shake up consumer interactions across the board. Thank you for taking the time to speak with us, Doug, and for giving us a look behind the curtain at how M&A is getting done in the age of AI.
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