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Artificial Intelligence (AI) M&A Update 1H 2024

Report: Artificial Intelligence in a Growing M&A Landscape, 1H 2024

Artificial Intelligence in a Growing M&A Landscape Industry Report by Solganick

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.

Download Report: Artificial Intelligence in a Growing M&A Landscape

About Solganick

Solganick is a data-driven investment bank and M&A advisory firm focused exclusively on software and IT services companies. Artificial Ingelligence mergers and acquisitons has been  a subsector of expertise within the firm for 5+ years. For more information, please contact us.

    Frequently Asked Questions

    1 What are the key trends in Artificial Intelligence (AI) mergers and acquisitions (M&A) for the first half of 2024?

    In 1H 2024, AI-related tech deals continued an uptrend with 195 acquisitions in Q2, though below 2021 peaks. Enterprise focus on AI is driving companies to acquire capabilities rather than build them, signaling high acquisitiveness for the remainder of the year.

    2 How did venture capital investment impact the AI M&A market in 1H 2024?

    Q2 2024 saw $24 billion flow into AI startups, making AI the best-funded venture sector for the first time. This significant investment, despite a lower deal count, highlights a focus on larger, strategic funding rounds within the AI industry.

    3 What economic conditions are influencing AI startup acquisitions and valuations?

    Uncertain macroeconomic conditions and lingering questions about a 'soft landing' are creating challenging funding environments for older AI startups. This scenario is pressuring valuations and pushing these companies towards M&A as an alternative, fostering a buyer's 'techquisition' market.