• AI Due Diligence

    Identify the value and the opportunities of AI

AI Due Diligence

Whether Blockchain, 3D Printing, or Quantum Computing – Artificial Intelligence (AI) is already in the advance, along with a multi-billion dollar business. Innovative tech startups are thus drawing more and more interest among potential investors. Consequently, AI Due Diligence is gaining significance for Private Equity Investments and M&A transactions. As one of Germany’s leading Data Science and Tech consultancies with the highest competence in AI Due Diligence, we directly assess all areas relevant to AI. We support you with the minimization of risks as well as the identification of new potentials. Our AI Due Diligence checklist guarantees a smooth Post Merger Integration and a successful acquisition.

Do you need support?

Are you planning to invest in high-tech, IT, or artificial intelligence? With our Due Diligence solutions, we strengthen your position in upcoming negotiations. Along with that, we support the sustainable growth of your investment. Discover our solutions and make secure and sustainable investments.

Why is AI Due Diligence important?

Since 2015, capital invested in AI startups has quintupled in size. The reasons for this enormous increase lie in the numerous perks and opportunities that come with AI. For example, the integration of AI into a business may increase productivity by 40%. Therefore, the market for AI is expected to grow by 50% in each of the next five years.

Results of our AI Due Diligence

We summarize the results of our AI Due Diligence audit and present them to you. The AI Red Flag Report shortly sums up the identified risks (regarding the potential amount of loss and its probability).  We also provide n extensive assessment of synergies and contextual information within a Full Report.

Your benefits

  • Analyzing the target’s AI infrastructure for strengths and weaknesses

  • Summary of synergies and contextual information within a Full Report

  • Summary of potential risks within a Red Flag Report (regarding the potential amount of loss and its probability).

  • Listing of oncost and quantification of reduction of the purchase price

  • Assessing the sustainability of AI investments

  • Comparative analysis of potential scenarios during and after the transaction

  • Recommendations for further negotiations (especially regarding the term sheet)

  • Securing working ability after the transaction

Free checklist for your AI Due Diligence

Checklist for your AI Due Diligence

Use your checklist to be perfectly prepared for upcoming M&A transactions. Prepare the sale or acquisition and the integration of new businesses

Artificial Intelligence as a strategy for digitization

Automatic processes with AI are becoming more and more common due to the increasing digitization of the central role of IT in business processes.  Simultaneously, digital business models based on AI are becoming increasingly significant. This includes innovative startups as well as traditional production within Industry 4.0. What’s more, customer relations and connections to logistics are often fully automated.

To estimate a company’s value, we have to fully understand its usage of AI technologies and complementary processes. Only this helps to understand the opportunities and risks of a business acquisition. Within this specialization AI Due Diligence audits are a common practice and an effective tool in combination with IT Due Diligence prior to Financial, Commercial, and Legal Due Diligence. In this process, the usage of AI is analyzed regarding operative and strategic requirements. Strengths and weaknesses of the target are thus documented in an AI Due Diligence Report.

Based on the Technical Due Diligence audit, the AI Due Diligence evaluates the efficiency of the used technologies focussing algorithms and processes as well as their effect on the acquisition’s value. Furthermore, synergy potentials with more existing business processes are analyzed. Especially digital businesses are marked by a high percentage of Data Scientists and IT positions in Analytics, Automation, and  AI within Financial Due Diligence audits. A prior AI Due Diligence provides you with basic information regarding these positions and their value. Thereby, intellectual property and the selection of sustainable technologies as a basis for AI can be an important business advantage for successful synergies.

Synergy effects of AI Due Diligence and IT Due Diligence

A systematic analysis of existing AI applications has recently gained importance for M&A processes. An extensive AI Due Diligence analyses the opportunities and threats of any aspects of the applied technology and evaluates them.

Risk Analysis

The analysis of the AI organization, the AI processesdata privacy, and data security are typical elements of AI Due Diligence within M&A transactions. Among others, the AI Due Diligence checklist assesses these topics. 

Risks relevant to AI are determined based on the scalability, developmental stage, high availability, and algorithms. Also, the audit checks if results can be replicated. This should further be applied to the IT Due Diligence. This ensures increasing demands to be met. Scale effects and additional investments are marked by unique cost structures in the field of AI.

Further risks are based on different standards on the buyer side and the target. If such derivations occur, the integration process following an acquisition may increase drastically. The planning and simulation of potential scenarios for transactions are valuable tools for risk mitigation prior to the acquisition. Delays or failures of said process, due to diverging systems and standards can be detected and evaluated preventively with an AI Due Diligence.

Dimensioning and Scalability

With increasing digitization the quantity of distributed systems for AI processes is also increasing. The IT infrastructure is marked by the connection of different sites and the division of tasks between work computers and servers. Furthermore, it is met by hybrid solutions of Cloud and Hybrid Cloud or internal datacenters. Therefore, a risk analysis must include network infrastructure and security. The dimensioning and sustainability of these distributed systems are further assessed during an AI Due Diligence.

Such an extensive audit of AI aspects within AI Due Diligence required a high amount of experience and expertise.

Project Management

Project Management within AI Operations and development is crucial for developing a digital business model. Especially, if rapid growth or the acquisition of additional business fields is planned, processes and KPI Systems have to support this growth.

Subsequently, an AI Due Diligence audit intensively analyzes the processes during the acquisition as well as prior results. Thereby, we analyze distinct systems of project management and established processes thanks to our longstanding experience. We further support process optimization during the growth phase with a buy-and-build strategy thanks to our expertise in AI Process Excellence. This way, we secure the long term success of your investments

Buyer and Vendor

With an AI Due Diligence, the vendor can identify value-influencing risks of AI processes and technology prior to selling a company. For the potential buyer and of a digital or high-tech company, AI Due Diligence is mandatory next economic audits.

This evaluates the scalability of the business model  and the operative reliability.

Investing in E-Commerce

Are you planning on investing in E-Commerce? Thanks to our expertise in the field we are aware of its organizational, technical, and financial challenges. To overcome them, we use customized Smart Analytics & Data Warehousing solutions. This way, you gain a 360° degree insight into the entire business structure and a guaranteed long-term success. After that, there are no more challenges to a successful and sustainable acquisition  in E-Commerce.

Our approach

  • Check List

    Within Technical Due Diligence or IT Due Diligence, standardized checklists are used. They are tailored to the requirements of each business and target. Required data and answers are thus made available to the buyer side within a data room.

  • Individual interviews

    Later in the process, we will carry out interviews with executives or experts from your company. These interviews, along with an additional on-site audit, guarantee a specialized evaluation. If desired, we can also look into the application of proper software or algorithms.

  • Data Analysis

    In addition to the first two steps, we will apply data analyses. With the help of these analyses, we can assess IT organization and IT costs. Doing this, an objective comparison with industrial standards as well as with external benchmarks can be accomplished.

  • Presentation of results

    The results of AI Due Diligence are summed up and presented to you. While the AI Red Flag Report summarizes all identified risks, the Full Report provides an extensive assessment of synergies and contextual information.

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