Written by Merlin Piscitelli, Datasite Chief Revenue Officer, EMEA
Artificial Intelligence (AI) is transforming industries worldwide, promising improved efficiency and productivity across several sectors, and the global mergers and acquisitions (M&A) industry is no exception.
From due diligence to data analysis, AI is streamlining many aspects of dealmaking. Yet, some are more hesitant to adopt the technology than others, and many M&A professionals are proceeding cautiously when it comes to integrating generative AI (GenAI) into their core processes.
A recent Datasite survey reveals dealmakers’ hesitation around incorporating GenAI into existing processes without appropriate government regulation first. In fact, the survey found that 73% of global dealmakers want to see AI regulated. They have concerns around data privacy and security, job displacement, quality control, intellectual property, and bias.
Dealmakers are not alone in their calls for regulation. A recent Cambridge University report urged the government to introduce ‘meaningful’ legislation in the UK before plugging AI technologies into the economy. The university warned, that without it, there would be a lack of confidence and trust, which in turn would affect adoption in the business and finance world.
Dealmakers’ wariness is causing many to tap the brakes. Reservations around GenAI appear to stem from uncertainty and distrust around the technology, as well as lack of familiarity and confidence using it. Datasite found that while 90% claim moderate to extensive AI familiarity, over 60% say their organisations have low GenAI adoption or are only using it experimentally. This gap between personal and professional GenAI integration suggests dealmakers have apprehension about diving in head-first without more validation, regulation, and security assurances.
The most significant barrier to adoption by dealmakers in their own business is data privacy and security concerns, according to Datasite findings. This highlights dealmakers’ mindfulness of the potential risks before they can fully embrace AI’s possibilities.
Still, dealmakers aren’t blind to the opportunities. Around 40% acknowledged they had witnessed increased productivity through more streamlined processes, and over half felt it has the potential to speed up M&A by 26%-50%. Additionally, with deal preparation lengthening as a result of this year’s economic uncertainty, AI is already being relied on to organise and categorize files for due diligence, as well as analyse data to enhance deal value and integration. Additionally, GenAI-powered tools, such as Datasite Intelligence, are helping to speed up research by surfacing precedents and buyer recommendations.
As the technology continues to advance, it will be important to have comprehensive legislation in place on how to implement the technology safely. The EU has already introduced the AI Act and the US White House has published a blueprint for an AI bill of rights, so the pressure is on in the UK to introduce its own AI regulations or face falling behind its global peers.
Until then, dealmakers may face a difficult dilemma. Do they delay and risk falling behind early adopters, proceed cautiously without regulatory guidance, or charge ahead hoping frameworks align with implemented GenAI capabilities?
Until updated and informed regulation is in place, dealmakers will likely proceed on parallel paths — some slamming the brakes before regulations are in place, others proceeding at full speed, in hopes that early adoption pays off. Ultimately, it will take collective coordination across industry players and governments to realise GenAI’s full potential in global dealmaking.
