July 12, 2024 – Solganick has published its latest M&A update on the artificial intelligence industry sector as of 1H 2024.

Acquisitions of AI-related companies in Q2 of 2024 accounted for 195 technology deals, down from 2021 highs but continuing a recent uptrend. The following summarizes the highlights of the report:

• 2023 was AI’s “year in the sun” as OpenAI’s Chat-GPT exploded onto the consumer scene. AI was cited as the most impactful disruptive technology industry by business executives surveyed by Gartner. We see enterprise focus on the technology priming high levels of acquisitiveness for the remainder of 2024, as companies “buy” important AI capabilities that they otherwise won’t “build.”
• Recent venture investment bears this thesis out, $24 billion flowed into AI startups in Q2 2024. AI became the best funded venture sector for the first time, and 5 of 6 billion-dollar deals went to AI companies. Deal count was down while overall investment was up.
• Uncertain macroeconomic conditions and lingering questions about a “soft landing” in the US conspire to create harsh funding conditions for older AI startups, who may need to seek alternatives in M&A. It will be a buyer’s “techquisition” market as valuations face pressure.
• Crystalizing use cases in the nascent AI industry will drive clarity and conviction for dealmakers in the coming months and years.