4 minute read | August.03.2023
Soaring interest and rapid growth in artificial intelligence (AI) has made it a major focus of technology transactions – but the standard acquisition agreement has not kept pace.
AI companies present unique risks to potential buyers that a standard transaction approach may not address, such as those posed by AI’s reliance on data and the dynamic nature of its insights. Buyers of AI companies should consider tailoring standard merger and acquisition agreements for AI-specific attributes, issues and risks to minimize deal risks and obtain an accurate picture of an AI system’s output and predictive capabilities.
Here are five potential risks of AI transactions that support a tailored approach:
In addition to the above, legislative protection in the AI space has yet to fully mature, and until it does, companies should protect their IP, data, algorithms and models, by ensuring their transactions and agreements address the unique risks presented by the use and ownership of training data, AI-based technology and any output data generated by such technology.
Want to learn more? Contact one of the authors.