Temperature Check: Artificial Intelligence / Cybersecurity M&A

Increasingly, companies are turning to AI to enhance their services, software applications, and integrations, leading to a parallel rise in cybersecurity issues and risks. As the adoption of AI technologies accelerates, new challenges will emerge in M&A discussions, including complex negotiations around data usage and protection, as well as risk allocation. These topics are now frequently featured in representations and warranties, indemnities, and limitations of liability clauses between the parties to the transaction. Though these challenges may slow activity in some sectors, expect the financial services sector to plow ahead, continuing its investments in cybersecurity measures to meet consumer and regulatory demands, while placing an intense focus on investing in AI to better analyze customer data.

Activity level: Balanced growth