Today, artificial intelligence, or AI, is influencing how companies practice it and offering new expansion opportunities. However, the potential with it is that during mergers and acquisitions (M&A), there are risks associated with it. But before you embrace AI technologies, you need to do your homework to avoid being scammed while at the same time getting the best value to take advantage of what AI has to offer. The following are a few simple ways to guide you through the AI due diligence process:
Understand AI Basics
Of course, before we begin, it will be helpful to define what is meant by artificial intelligence and how it functions. This work can be other types of AI such as machine learning AI, natural language processing AI, or computer vision AI. They are different in their characteristics and may have different risks as well. Knowledge about these types will also assist you in asking the right questions and making an appropriate assessment of the technology in question.
Check the Data
Data is always a vital component of any AI system, so the quality and sources of data should be inspected. Ask questions like: Where did the data come from? Is it fair and diverse? To me, this means that if the data that has been used for training the AI is unfair or wrong, then the output of the AI is also unfair. Check that your company applies useful data practices and meets the regulations of a certain country, for example, GDPR or CCPA. It equally serves to minimize legal liabilities while at the same time fostering customer and business partner confidence.
Look at Algorithms and Models
When comprehending what the information exposes, look at the algorithms and models they apply in these AI systems. It is necessary to know how these systems appeared and what methods of experimental verification of their effectiveness were used. Were those checked against the current standards of truck manufacturing companies? This is important because AI models require consistent inspection to guarantee they are effective and still competitive. Furthermore, consider how modifiable or scalable these models are to meet your requirements should that change after the acquisition.
Smile for Intellectual Property (IP) Issues
AI technologies can include many issues of intellectual property rights. Who owns the algorithms, and who owns the data that the algorithms are trained on? Check the licenses and patents tied to AI technology so that you may not be on the wrong side of the law someday. Understanding the IP setting will therefore assist you in avoiding costly solutions and shielding your organization.
Analyze Cyber Security Strategies
The next task that AI systems can fulfill is to check cybersecurity since these systems can be cyber threats themselves. Find out about the target company’s general cybersecurity policies and specifically about their defense against threats targeting AI solutions. The laws should ensure that they have efficient ways of coming up with a list of any possible threats and how they should handle them. Multi-layered security is crucial to protect an AI system that fails in this aspect; the data is leaked, and your company suffers image and monetary loss.
Find Opportunities for Value
Thus, when searching for risks, it is also necessary to pay attention to the opportunities that AI technologies can provide. Speak to the technical team to find out how these systems can make things better, generate new ideas, or produce more income. This positive approach will assist you in opening your eyes to the potential of making the best out of the Artificial Intelligence assets that you are willing to buy.
Roles and Responsibilities After the Merger
Last of all, there is the matter of how well you are going to integrate the two companies. Develop a clear plan and demonstrate how the work of your organization will be done and how exactly you will incorporate those AI technologies into your systems. Some strategic components that should be incorporated into this plan include team readiness, organization of AI objectives with organizational objectives, and organization of success indicators. To get the best out of the new AI technology, an integration plan is essential to follow.
Conclusion
AI due diligence is not a formality superimposed on the legal process whereby you go down a tick list of certain changes you want; it’s about appreciation of the technology and what it implies. As you can see, it’s not difficult to minimize risks and discover great opportunities by completing the following tasks: As we witness the rise of AI as a significant element of various business models, it has become crucial to perform proper due diligence to make successful sustainable choices.
