The growing role of AI in modern M&A deals

Artificial intelligence is no longer confined to the tech sector-it now plays a role across virtually every industry. Partner and head of Torys' Emerging Companies and Venture Capital group, Konata Lake, spoke to Lexpert for its Special Edition on Technology publication about AI's place in M&A transactions.

"At its core, an M&A transaction is a buyer deciding that a target company has assets, rights, products, or services they want to acquire," Konata explained.

"The question now is how AI affects the value of those assets and future opportunities."

Data has become a central concern in AI-driven M&A. Konata noted the importance of understanding where the data came from, whether the company has the legal rights to use it, and whether the proposed uses align with what users originally agreed to.

He went on to say that as regulations continue to evolve, buyers must consider both current requirements and future policy shifts, as these factors can significantly influence how a company uses AI and how it is ultimately valued in a transaction.

AI is also changing how buyers assess disruption risk. "A buyer now has to ask whether the company they're acquiring could become obsolete if a major AI platform releases a competing feature," he said. M&A teams are becoming more multidisciplinary, with the need for proficiency in areas like privacy, intellectual property, employment, tax, and regulation becoming more prominent in AI-related deals. At the same time, companies face a timing challenge.

"Businesses need to modernize and invest in technology," Konata said.

"But they're doing so in an environment where what's cutting-edge today may be outdated very quickly."

You can read more about our Artificial Intelligence work on our practice page.